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Aurelion Inc.

Aurelion Inc.AUREEarnings & Financial Report

Nasdaq · Financials

What changed in Aurelion Inc.'s 20-F — 2023 vs 2024

Top changes in Aurelion Inc.'s 2024 20-F

695 paragraphs added · 462 removed · 320 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

113 edited+31 added−40 removed317 unchanged
Broad or active public trading market for our Class A Ordinary Shares may not develop or be sustained. If we fail to meet applicable listing requirements, Nasdaq may delist our Ordinary Shares from trading, in which case the liquidity and market price of our Class A Ordinary Shares could decline.
Broad or active public trading market for our Class A Ordinary Shares may not develop or be sustained. If we fail to meet applicable listing requirements, Nasdaq may delist our Class A Ordinary Shares from trading, in which case the liquidity and market price of our Class A Ordinary Shares could decline.
Our second amended and restated memorandum of association and second amended and restated articles of association require any Class B Ordinary Shares to be automatically converted into Class A Ordinary Shares upon, among others, a direct or indirect sale, transfer, assignment or disposition of such Class A Ordinary Shares or a direct or indirect transfer or assignment of the voting power attached to such Class B Ordinary Shares through voting proxy or otherwise, to any person or entity an affiliate of the holder of such Class B Ordinary Shares.
Our Second Amended and Restated Memorandum and Articles of Association require any Class B Ordinary Shares to be automatically converted into Class A Ordinary Shares upon, among others, a direct or indirect sale, transfer, assignment or disposition of such Class A Ordinary Shares or a direct or indirect transfer or assignment of the voting power attached to such Class B Ordinary Shares through voting proxy or otherwise, to any person or entity an affiliate of the holder of such Class B Ordinary Shares.
Senate passed the Accelerating Holding Foreign Companies Accountable Act and on December 29, 2022, a legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”) was signed into law by President Biden, which contained, among other things, an identical provision to Accelerating Holding Foreign Companies Accountable Act and amended the HFCAA by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time before your securities may be prohibited from trading or delisted.
Senate passed the Accelerating Holding Foreign Companies Accountable Act and on December 29, 2022, a legislation entitled “Consolidated Appropriations Act, 2023” (the “Consolidated Appropriations Act”) was signed into law by former President Biden, which contained, among other things, an identical provision to Accelerating Holding Foreign Companies Accountable Act and amended the HFCAA by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time before your securities may be prohibited from trading or delisted.
If we fail to comply with the applicable listing standards and Nasdaq delists our Ordinary Shares, we and our Shareholders could face significant material adverse consequences, including: ● a limited availability of market quotations for our Ordinary Shares; ● reduced liquidity for our Ordinary Shares; ● a determination that our Ordinary Shares are “penny stock”, which would require brokers trading in our Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary Shares; ● a limited amount of news about us and analyst coverage of us; and ● a decreased ability for us to issue additional equity securities or obtain additional equity or debt financing in the future.
If we fail to comply with the applicable listing standards and Nasdaq delists our Ordinary Shares, we and our Shareholders could face significant material adverse consequences, including: ● a limited availability of market quotations for our Class A Ordinary Shares; ● reduced liquidity for our Class A Ordinary Shares; ● a determination that our Class A Ordinary Shares are “penny stock”, which would require brokers trading in our Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary Shares; ● a limited amount of news about us and analyst coverage of us; and ● a decreased ability for us to issue additional equity securities or obtain additional equity or debt financing in the future.
If Nasdaq does not list our securities, or subsequently delists our securities from trading, we could face significant consequences, including: ● a limited availability for market quotations for our Ordinary Shares; ● reduced liquidity with respect to our Ordinary Shares; ● a determination that our Ordinary Shares are “penny stock,” which will require brokers trading in our Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary Shares; ● limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future.
If Nasdaq does not list our securities, or subsequently delists our securities from trading, we could face significant consequences, including: ● a limited availability for market quotations for our Ordinary Shares; ● reduced liquidity with respect to our Ordinary Shares; ● a determination that our Ordinary Shares are “penny stock,” which will require brokers trading in our Ordinary Shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our Ordinary Shares; 23 ● limited amount of news and analyst coverage; and ● a decreased ability to issue additional securities or obtain additional financing in the future.
Any of such disciplinary actions could have an adverse impact on our business operations and financial results. Some of our subsidiaries’ clients reside in other countries or jurisdictions other than Hong Kong and the Cayman Islands. We may incur substantial additional costs to obtain and maintain required licenses and permits and/or comply with applicable laws and regulations.
Any of such disciplinary actions could have an adverse impact on our business operations and financial results. 15 Some of our subsidiaries’ clients reside in other countries or jurisdictions other than Hong Kong and the Cayman Islands. We may incur substantial additional costs to obtain and maintain required licenses and permits and/or comply with applicable laws and regulations.
If we are subject to the filing requirements, we cannot assure you that we will be able to complete such filings in a timely manner or even at all. 5 Since these statements and regulatory actions are new, it is also highly uncertain in the interpretation and the enforcement of the above cybersecurity and overseas listing laws and regulation.
If we are subject to the filing requirements, we cannot assure you that we will be able to complete such filings in a timely manner or even at all. Since these statements and regulatory actions are new, it is also highly uncertain in the interpretation and the enforcement of the above cybersecurity and overseas listing laws and regulation.
We cannot assure you that these counterparties will continue to maintain all applicable permits and approvals, and any non-compliance on the part of these counterparties may cause potential liabilities to our subsidiaries and in turn disrupt their operations. 14 The impairment or negative performance of other participants in the financial services industry could adversely affect our subsidiaries.
We cannot assure you that these counterparties will continue to maintain all applicable permits and approvals, and any non-compliance on the part of these counterparties may cause potential liabilities to our subsidiaries and in turn disrupt their operations. The impairment or negative performance of other participants in the financial services industry could adversely affect our subsidiaries.
Our reputation and brand is vulnerable to many threats that can be difficult or impossible to control, and costly or impossible to remediate. Regulatory inquiries or investigations, lawsuits initiated by clients or other third parties, employee misconduct, perceptions of conflicts of interest and rumors, among other things, could substantially damage our reputation, even if they are baseless or satisfactorily addressed.
Our reputation and brand are vulnerable to many threats that can be difficult or impossible to control, and costly or impossible to remediate. Regulatory inquiries or investigations, lawsuits initiated by clients or other third parties, employee misconduct, perceptions of conflicts of interest and rumors, among other things, could substantially damage our reputation, even if they are baseless or satisfactorily addressed.
For details, see “Enforceability of Civil Liabilities.” 25 We are an “emerging growth company” within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make it more difficult to compare our performance with other public companies.
For details, see “Enforceability of Civil Liabilities.” We are an “emerging growth company” within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make it more difficult to compare our performance with other public companies.
Therefore, we do not believe that the Data Security Law is applicable to us. 3 On August 20, 2021, the Standing Committee of the National People’s Congress of China promulgated the Personal Information Protection Law, which integrates the scattered rules with respect to personal information rights and privacy protection and took effect on November 1, 2021.
Therefore, we do not believe that the Data Security Law is applicable to us. On August 20, 2021, the Standing Committee of the National People’s Congress of China promulgated the Personal Information Protection Law, which integrates the scattered rules with respect to personal information rights and privacy protection and took effect on November 1, 2021.
The Cayman Islands courts are also unlikely to impose liabilities against us in original actions brought in the Cayman Islands, based on certain civil liability provisions of U.S. securities laws. 24 Currently, a substantial majority of our operations are conducted in Hong Kong, and a substantial majority of our assets are located in Hong Kong.
The Cayman Islands courts are also unlikely to impose liabilities against us in original actions brought in the Cayman Islands, based on certain civil liability provisions of U.S. securities laws. Currently, a substantial majority of our operations are conducted in Hong Kong, and a substantial majority of our assets are located in Hong Kong.
As a company mainly conducting business in Hong Kong, a special administrative region of China, we may be affected directly or indirectly by PRC laws and regulations. The legal system in mainland China is a civil law system based on written statutes.
As a company conducting business in Hong Kong, a special administrative region of China, we may be affected directly or indirectly by PRC laws and regulations. The legal system in mainland China is a civil law system based on written statutes.
In late 2020, our subsidiaries started to provide discretionary account management services to their clients. Since late 2021, our subsidiaries started providing wealth management services in the U.S. We recorded net income for the fiscal years ended September 30, 2021 and 2022, and net loss for the fiscal year ended September 30, 2023.
In late 2020, our subsidiaries started to provide discretionary account management services to their clients. Since late 2021, our subsidiaries started providing wealth management services in the U.S. We recorded net income for the fiscal year ended September 30, 2022, and net loss for the fiscal years ended September 30, 2023 and 2024.
As a result of any of the foregoing, our business, financial condition and prospects could be materially and adversely affected. We are subject to concentration risk because we generated the majority of our revenues through a limited number of product brokers and advisory service clients.
As a result of any of the foregoing, our business, financial condition and prospects could be materially and adversely affected. 9 We are subject to concentration risk because we generated the majority of our revenues through a limited number of product brokers and advisory service clients.
If we fail to successfully promote and maintain our brand while incurring additional expenses, our results of operations and financial condition would be adversely affected, and our ability to grow our subsidiaries’ business may be impaired. Our subsidiaries’ business depends on the continued efforts of our senior management.
If we fail to successfully promote and maintain our brand while incurring additional expenses, our results of operations and financial condition would be adversely affected, and our ability to grow our subsidiaries’ business may be impaired. 14 Our subsidiaries’ business depends on the continued efforts of our senior management.
As a result of the foregoing, PAM and PWM may be found guilty of a criminal offence and be held liable on conviction to a fine of HK$100,000 (approximately $12,800). 17 Under the Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong), or the MPFSO, every employer of an employee of 18 years of age or above but under 65 years of age is required to take all practical steps to ensure the employee becomes a member of a registered non-governmental mandatory provident fund scheme, or MPF Scheme.
As a result of the foregoing, PAM and PWM may be found guilty of a criminal offence and be held liable on conviction to a fine of HK$100,000 (approximately $12,800). 16 Under the Mandatory Provident Fund Schemes Ordinance (Chapter 485 of the Laws of Hong Kong), or the MPFSO, every employer of an employee of 18 years of age or above but under 65 years of age is required to take all practical steps to ensure the employee becomes a member of a registered non-governmental mandatory provident fund scheme, or MPF Scheme.
For the period between October 17, 2017 and August 9, 2018, instead of making contributions to the MPF Scheme required under the MPFSO, PWM paid the amounts directly to its employees. As a result of the foregoing, PWM may be found guilty of a criminal offence and be held liable on conviction to a fine of HK$350,000 (approximately $44,700).
For the period between October 17, 2017 and August 9, 2018, instead of making contributions to the MPF Scheme required under the MPFSO, PWM paid the amounts directly to its employees. As a result of the foregoing, PWM may be found guilty of a criminal offence and be held liable on conviction to a fine of HK$350,000 (approximately $44,800).
As of September 30, 2023, we have implemented measures and intend to continue to implement measures designed to improve our internal control over financial reporting to address the underlying causes of these material weaknesses, including engaging qualified financial and accounting advisory team and relevant staff with experience in U.S.
As of September 30, 2024, we have implemented measures and intend to continue to implement measures designed to improve our internal control over financial reporting to address the underlying causes of these material weaknesses, including engaging qualified financial and accounting advisory team and relevant staff with experience in U.S.
The PRC government may exert substantial influence and discretion over mainland China residents and the manner in which companies incorporated under the PRC laws must conduct their business activities. Through our subsidiaries, we are a Hong Kong-based company with no operations in mainland China, and mainland China residents may purchase our subsidiaries’ product in Hong Kong.
The PRC government may exert substantial influence and discretion over mainland China residents and the manner in which companies incorporated under the PRC laws must conduct their business activities. Through our subsidiaries, we are a Hong Kong-based company with no operations in mainland China, and mainland China residents may purchase our subsidiaries’ products in Hong Kong.
If we were to become subject to such direct influence or discretion, it may result in a material change in our subsidiaries’ operations. We currently have no operations in mainland China. Our principal executive offices are located, and our subsidiaries operate, in Hong Kong, a special administrative region of China.
If we were to become subject to such direct influence or discretion, it may result in a material change in our subsidiaries’ operations. We currently have no operations in mainland China. Our principal executive offices are located, and our subsidiaries operate, in Japan, Singapore, and Hong Kong, a special administrative region of China.
The discretionary accounts our subsidiaries managed also invested in the IPO shares of certain target companies listed on the Hong Kong Stock Exchange. Our subsidiaries may continue providing discretionary account management services or launch funds with similar short-term IPO market investment strategy in the future, which involves substantial investment risks.
The discretionary accounts our subsidiaries managed invested in the IPO shares of certain target companies listed on the Hong Kong Stock Exchange. Our subsidiaries may continue providing discretionary account management services or launch funds with short-term IPO market investment strategy in the future, which involves substantial investment risks.
Moreover, our subsidiaries’ business partially relies on technologies developed or licensed by third parties, and we may not be able to obtain licenses and technologies from third parties on reasonable terms, or at all. 20 Third parties may obtain and use our intellectual property without our due authorization. Confidentiality and non-compete agreements may be breached by counter-parties.
Moreover, our subsidiaries’ business partially relies on technologies developed or licensed by third parties, and we may not be able to obtain licenses and technologies from third parties on reasonable terms, or at all. 19 Third parties may obtain and use our intellectual property without our due authorization. Confidentiality and non-compete agreements may be breached by counter-parties.
In accordance with the provisions of the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act, we and our independent registered public accounting firm were not required to, and did not, perform an evaluation of our internal control over financial reporting as of September 30, 2021, 2022 and 2023.
In accordance with the provisions of the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act, we and our independent registered public accounting firm were not required to, and did not, perform an evaluation of our internal control over financial reporting as of September 30, 2022, 2023, and 2024.
A substantial judgment, award, settlement, fine, or penalty could be materially adverse to our operating results or cash flows for a particular future period, depending on our results for that period. 19 Failure to manage our liquidity and cash flows may materially and adversely affect our financial conditions and operating results.
A substantial judgment, award, settlement, fine, or penalty could be materially adverse to our operating results or cash flows for a particular future period, depending on our results for that period. 18 Failure to manage our liquidity and cash flows may materially and adversely affect our financial conditions and operating results.
During the fiscal years ended September 30, 2021, 2022 and 2023, we generated the majority of our total wealth management services revenues through a limited selection of wealth management products, and we expect to continue to generate our revenues from wealth management services through a limited selection of wealth management products.
During the fiscal years ended September 30, 2022, 2023, and 2024, we generated the majority of our total wealth management services revenues through a limited selection of wealth management products, and we expect to continue to generate our revenues from wealth management services through a limited selection of wealth management products.
Any failure to obtain or a delay in obtaining the necessary permissions from or complete the necessary filing procedure with the PRC governmental authorities to conduct offerings or list outside of Hong Kong or mainland China may subject us and/or our subsidiaries to sanctions imposed by the PRC governmental authorities, which could include fines and penalties, suspension of business, proceedings against us and/or our subsidiaries, and even fines on the controlling shareholder and other responsible persons, and our subsidiaries’ ability to conduct our business, our ability to invest into mainland China as foreign investments or accept foreign investments, or our ability to list on a U.S. or other overseas exchange may be restricted, and our subsidiaries’ business, and our reputation, financial condition, and results of operations may be materially and adversely affected.
Any failure to obtain or a delay in obtaining the necessary permissions from or complete the necessary filing procedure with the PRC governmental authorities to conduct offerings or list outside of Hong Kong or mainland China may subject us and/or our subsidiaries to sanctions imposed by the PRC governmental authorities, which could include fines and penalties, suspension of business, proceedings against us and/or our subsidiaries, and our subsidiaries’ ability to conduct our business, our ability to invest into mainland China as foreign investments or accept foreign investments, or our ability to list on a U.S. or other overseas exchange may be restricted, and our subsidiaries’ business, and our reputation, financial condition, and results of operations may be materially and adversely affected.
Also, unless we are specifically named as the party that is being investigated under the SFC investigation, we generally do not know whether we, any member of the Company and all of its subsidiaries, or any of their respective directors or staff or any responsible officer or licensed representative of PAM is the subject of the SFC investigations.
Also, unless we are specifically named as the party that is being investigated under the SFC investigation, we generally do not know whether we, any member of the Company and all of its subsidiaries, or any of their respective directors or staff or any responsible officer or licensed representative of any such subsidiary, is the subject of the SFC investigations.
Assuming our Ordinary Shares are listed on Nasdaq, we cannot assure you that we will be able to meet the continued listing standards of Nasdaq in the future.
Assuming our Class A Ordinary Shares are listed on Nasdaq, we cannot assure you that we will be able to meet the continued listing standards of Nasdaq in the future.
For the fiscal year ended September 30, 2023, we derived a small portion of our revenues from referral fees paid by insurance brokers. The referral fee rates are set by such brokers or negotiated between such parties and our subsidiaries, and vary from product to product.
For the fiscal years ended September 30, 2023 and 2024, we derived a small portion of our revenues from referral fees paid by insurance brokers. The referral fee rates are set by such brokers or negotiated between such parties and our subsidiaries, and vary from product to product.
Referral fees from our subsidiaries’ wealth management services accounted for a small portion of our revenues for the fiscal year ended September 30, 2023. Additionally, our subsidiaries started providing asset management related advisory services in the fiscal year ended September 30, 2019.
Referral fees from our subsidiaries’ wealth management services accounted for a small portion of our revenues for the fiscal years ended September 30, 2023 and 2024. Additionally, our subsidiaries started providing asset management related advisory services in the fiscal year ended September 30, 2019.
Our subsidiaries’ asset management services generated the majority of our revenues for the fiscal years ended September 30, 2021 and 2023.
Our subsidiaries’ asset management services generated the majority of our revenues for the fiscal years ended September 30, 2023 and 2024.
Hongtao Shi, our chairman of the board of directors (the “Chairman”) and Chief Executive Officer, is critical to the management of our subsidiaries’ business and operations and the development of our subsidiaries’ business strategies. While we have provided various incentives to our management, there can be no assurance that we can continue to retain their services.
Kazuho Komoda, our chairman of the board of directors (the “Chairman”) and Chief Executive Officer, is critical to the management of our subsidiaries’ business and operations and the development of our subsidiaries’ business strategies. While we have provided various incentives to our management, there can be no assurance that we can continue to retain their services.
You may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders. The Companies Act of the Cayman Islands does not provide shareholders with any right to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting.
You may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders. The Companies Act of the Cayman Islands provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting.
For the fiscal year ended September 30, 2023, we generated the majority of our total revenue through a limited number of advisory service clients . For the fiscal year ended September 30, 2022, we generated the majority of our total revenue through a limited number of product brokers.
For the fiscal years ended September 30, 2024 and 2023, we generated the majority of our total revenue through a limited number of advisory service clients. For the fiscal year ended September 30, 2022, we generated the majority of our total revenue through a limited number of product brokers.
Our board of directors may, in its sole discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which we have a lien.
Our board of directors may decline to register transfers of Ordinary Shares in certain circumstances. Our board of directors may, in its sole discretion, decline to register any transfer of any ordinary share which is not fully paid up or on which we have a lien.
Chi Tak Sze, our director and controlling shareholder, has established a few entities that engage a few employees in mainland China, and such entities use “Prestige” as their business names in mainland China, the same as our brand name, and may promote their business or solicit clients using the business name of “Prestige” in mainland China.
Chi Tak Sze, one of our directors, has established a few entities that engage a few employees in mainland China, and such entities use “Prestige” as their business names in mainland China, the same as our brand name, and may promote their business or solicit clients using the business name of “Prestige” in mainland China.
We cannot assure you that our subsidiaries will be able to maintain their existing licenses, qualifications or permits, renew any of them when their current term expires or obtain additional licenses necessary for our future business expansion.
If our subsidiaries are required to obtain and maintain such licenses, we cannot assure you that our subsidiaries will be able to obtain and maintain their existing licenses, qualifications or permits, renew any of them when their current term expires or obtain additional licenses necessary for our future business expansion.
The PCAOB is currently able to conduct inspections of audit firms located in mainland China and Hong Kong and conduct inspections of U.S. audit firms where audit work papers are located in mainland China.
The PCAOB is currently able to conduct inspections of audit firms located in mainland China and Hong Kong and conduct inspections of U.S. audit firms where audit work papers are located in mainland China. The audit workpapers for our Hong Kong operations are located in mainland China.
The audit workpapers for our Hong Kong operations are located in mainland China. 27 In addition, as part of a continued regulatory focus in the United States on access to audit and other information currently protected by national law, in particular China’s, in June 2019, a bipartisan group of lawmakers introduced bills in both houses of Congress that would require the SEC to maintain a list of issuers for which the PCAOB is not able to inspect or investigate an auditor report issued by a foreign public accounting firm.
In addition, as part of a continued regulatory focus in the United States on access to audit and other information currently protected by national law, in particular China’s, in June 2019, a bipartisan group of lawmakers introduced bills in both houses of Congress that would require the SEC to maintain a list of issuers for which the PCAOB is not able to inspect or investigate an auditor report issued by a foreign public accounting firm.
In the future, our subsidiaries may continue providing discretionary account management services or launch funds with similar short-term IPO investment strategy. However, such investment strategy involves substantial risks.
Our subsidiaries may continue providing discretionary account management services or launch funds with short-term IPO investment strategy. However, such investment strategy involves substantial risks.
The Nasdaq Listing Rules may require shareholder approval for certain corporate matters, such as requiring that shareholders be given the opportunity to vote on all equity compensation plans and material revisions to those plans, certain ordinary share issuances. We intend to comply with the corporate governance requirements of the Nasdaq Listing Rules.
The Nasdaq Listing Rules may require shareholder approval for certain corporate matters, such as requiring that shareholders be given the opportunity to vote on all equity compensation plans and material revisions to those plans, certain ordinary share issuances.
Our total net revenue grew at a compound annual growth rate, or CAGR, of approximately 88% from the inception of our business in 2017 to the fiscal year ended September 30, 2022, while it endured a large decrease during the fiscal year ended September 30, 2023. We cannot assure you that we will grow at the historical rate of growth.
Our total net revenue grew at a compound annual growth rate, or CAGR, of approximately 88% from the inception of our business in 2017 to the fiscal year ended September 30, 2022, while it endured a large decrease during the fiscal year ended September 30, 2023.
Effective internal control over financial reporting is important to prevent fraud. As a result, our business, financial condition, results of operations and prospects, as well as the market for and trading price of our Ordinary Shares, may be materially and adversely affected if we do not have effective internal controls.
As a result, our business, financial condition, results of operations and prospects, as well as the market for and trading price of our Ordinary Shares, may be materially and adversely affected if we do not have effective internal controls.
As our subsidiaries manage and advise fund of funds (FOF) that invest in top ranked hedge funds where the investment performance and the investment strategies of the underlying assets are not controlled by our subsidiaries, but determined by the managers of the underlying funds and other economic and market events not controlled or foreseeable by our subsidiaries, such as interest rate fluctuation, global financial crisis, flash crash and other black swan events.
As our subsidiaries manage and advise fund of funds (FOF) that invest in top ranked hedge funds where the investment performance and the investment strategies of the underlying assets are not controlled by our subsidiaries, but determined by the managers of the underlying funds and other economic and market events not controlled or foreseeable by our subsidiaries, such as interest rate fluctuation, global financial crisis, flash crash and other black swan events. 11 In the event that the fund that our subsidiaries manage were to perform poorly, our revenue, income and cash flow could decline.
Each Class B ordinary share is convertible into one Class A Ordinary Shares at any time by the holder thereof, while the Class A Ordinary Shares are not convertible into the Class B Ordinary Shares under any circumstances.
Each Class B ordinary share is convertible into one Class A Ordinary Shares at any time by the holder thereof.
In addition, we generated a net income of approximately $1,912,016 and $1,354,538 during the fiscal years 2021, 2022, and a net loss of $1,035,751 during the fiscal year 2023, respectively.
In addition, we generated a net income of approximately $1,354,538 during the fiscal year 2022, and a net loss of $1,035,751 and $6,876,830 during the fiscal years 2023 and 2024, respectively.
If some of our key wealth management product brokers decide not to enter into new contracts with our subsidiaries, or our subsidiaries’ relationships with such key wealth management product brokers are otherwise impacted, our subsidiaries’ business and our operating results could be materially and adversely affected.
If some of our key wealth management product brokers decide not to enter into new contracts with our subsidiaries, or our subsidiaries’ relationships with such key wealth management product brokers are otherwise impacted, our subsidiaries’ business and our operating results could be materially and adversely affected. 8 If our subsidiaries fail to attract and retain qualified employees to manage their client relationships, our subsidiaries’ business could suffer.
However, in connection with the audits of our consolidated financial statements as of September 30, 2021 and 2022, we identified material weaknesses in our internal control over financial reporting, as defined in the standards established by Public Company Accounting Oversight Board (the “ PCAOB ” ) as of September 30, 2021 and 2022.
However, in connection with the audit of our consolidated financial statements as of September 30, 2024, we identified material weaknesses in our internal control over financial reporting, as defined in the standards established by Public Company Accounting Oversight Board (the “PCAOB”).
Any impairment on the value of the underlying assets to our subsidiaries’ FOF, whether caused by fluctuations or downturns in the underlying markets, the underlying funds or otherwise, will reduce our revenues generated from asset management business, which in turn may materially and adversely affect our overall financial performance and results of operations. 12 PCM1, a fund our subsidiaries used to manage, invested in IPO shares of a company through an underlying fund.
Any impairment on the value of the underlying assets to our subsidiaries’ FOF, whether caused by fluctuations or downturns in the underlying markets, the underlying funds or otherwise, will reduce our revenues generated from asset management business, which in turn may materially and adversely affect our overall financial performance and results of operations.
If our subsidiaries fail to retain their employees, our subsidiaries could incur significant expenses in hiring and training their replacements, and the quality of our subsidiaries’ services and their ability to serve their high net worth and ultra-high net worth clients, resulting in a material adverse effect to our subsidiaries’ business.
If our subsidiaries fail to retain their employees, our subsidiaries could incur significant expenses in hiring and training their replacements, and the quality of our subsidiaries’ services and their ability to serve their high net worth and ultra-high net worth clients, resulting in a material adverse effect to our subsidiaries’ business. 20 Increases in labor costs in the Hong Kong may adversely affect our subsidiaries’ business and our results of operations.
The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.
The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions. 27 On December 2, 2021, the SEC adopted amendments to finalize rules implementing the submission and disclosure requirements in the HFCAA.
Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulations in each state in which we offer our securities. We do not intend to pay dividends for the foreseeable future.
Further, if we were no longer listed on Nasdaq, our securities would not be covered securities and we would be subject to regulations in each state in which we offer our securities.
The financial statements of our Company have been prepared on a going concern basis. We have prepared our financial statements on a “going concern” basis which presumes that we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future.
We have prepared our financial statements on a “going concern” basis which presumes that we will be able to realize our assets and discharge our liabilities in the normal course of business for the foreseeable future. Our ability to continue as a going concern is dependent upon the successful commercialization of our current services.
In such cases, we and/or our subsidiaries may need to cease the provision of such services or obtain the relevant licenses and qualifications. 16 In addition, if future Hong Kong regulations require that our subsidiaries obtain additional licenses or permits in order to continue to conduct our subsidiaries’ business operations, there is no guarantee that our subsidiaries would be able to obtain such licenses or permits in a timely fashion, or at all.
In addition, if future Hong Kong regulations require that our subsidiaries obtain additional licenses or permits in order to continue to conduct our subsidiaries’ business operations, there is no guarantee that our subsidiaries would be able to obtain such licenses or permits in a timely fashion, or at all.
However, we may, in the future, consider following home country practice in lieu of the requirements under the Nasdaq Listing Rules with respect to certain corporate governance standards which may afford less protection to investors. 23 Although as a foreign private issuer we are exempt from certain corporate governance standards applicable to U.S. issuers, if we cannot satisfy, or continue to satisfy, the initial listing requirements and other rules of Nasdaq, our securities may be delisted, which could negatively impact the price of our securities and your ability to sell them.
Although as a foreign private issuer we are exempt from certain corporate governance standards applicable to U.S. issuers, if we cannot satisfy, or continue to satisfy, the initial listing requirements and other rules of Nasdaq, our securities may be delisted, which could negatively impact the price of our securities and your ability to sell them.
Some provisions of our memorandum and articles of association, which became effective on January 19, 2024, may discourage, delay or prevent a change in control of our company or management that shareholders may consider favorable, including, among other things, the provisions that authorize our board of directors to issue shares with preferred, deferred or other special rights or restrictions. 26 Our board of directors may decline to register transfers of Ordinary Shares in certain circumstances.
Some provisions of our Second Amended and Restated Memorandum and Articles of Association, which became effective on 29 December, 2023, may discourage, delay or prevent a change in control of our company or management that shareholders may consider favorable, including, among other things, the provisions that authorize our board of directors to issue shares with preferred, deferred or other special rights or restrictions.
Our ability to continue as a going concern is dependent upon the successful commercialization of our current services. Ultimately, we must achieve a profitable level of operation through wealth management services and assets management services. We may require additional financing in the interim to fund our continuing operations and expected business plan.
Ultimately, we must achieve a profitable level of operation through wealth management services and assets management services. We may require additional financing in the interim to fund our continuing operations and expected business plan.
In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources.
In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may, in the future, be the target of similar litigation.
Increases in labor costs in the Hong Kong may adversely affect our subsidiaries’ business and our results of operations. The economy in Hong Kong has experienced increases in inflation and labor costs in recent years. As a result, average wages in Hong Kong are expected to continue to increase.
The economy in Hong Kong has experienced increases in inflation and labor costs in recent years. As a result, average wages in Hong Kong are expected to continue to increase.
On the same day, the CSRC held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which clarifies that (i) on or prior to the effective date of the Trial Measures, companies in mainland China that have already submitted valid applications for overseas offering and listing but have not obtained approval from overseas regulatory authorities or stock exchanges shall complete the filing before the completion of their overseas offering and listing; and (ii) companies in mainland China which, prior to the effective date of the Trial Measures, have already obtained the approval from overseas regulatory authorities or stock exchanges and are not required to re-perform the regulatory procedures with the relevant overseas regulatory authority or stock exchange, but have not completed the indirect overseas listing, shall complete the overseas offering and listing before September 30,2023, and failure to complete the overseas listing within such six-month period will subject such companies to the filing requirements with the CSRC.
On the same day, the CSRC held a press conference for the release of the Trial Measures and issued the Notice on Administration for the Filing of Overseas Offering and Listing by Domestic Companies, which clarifies that (i) on or prior to the effective date of the Trial Measures, companies in mainland China that have already submitted valid applications for overseas offering and listing but have not obtained approval from overseas regulatory authorities or stock exchanges shall complete the filing before the completion of their overseas offering and listing; and (ii) companies in mainland China which, prior to the effective date of the Trial Measures, have already obtained the approval from overseas regulatory authorities or stock exchanges and are not required to re-perform the regulatory procedures with the relevant overseas regulatory authority or stock exchange, but have not completed the indirect overseas listing, shall complete the overseas offering and listing before September 30,2023, and failure to complete the overseas listing within such six-month period will subject such companies to the filing requirements with the CSRC. 5 Based on the assessment conducted by the management, we are not subject to the Trial Measures, because we are incorporated in the Cayman Islands and our subsidiaries are incorporated in Hong Kong, the British Virgin Islands and other regions outside of mainland China and operate in Hong Kong without any subsidiary or VIE structure in mainland China, and we do not have any business operations or maintain any office or personnel in mainland China.
However, should PRC authorities obstruct or otherwise fail to facilitate the PCAOB’s access in the future, the PCAOB Board will consider the need to issue a new determination. 28 On December 29, 2022, the Consolidated Appropriations Act was signed into law by President Biden, which contained, among other things, an identical provision to Accelerating Holding Foreign Companies Accountable Act and amended the Holding Foreign Companies Accountable Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.
On December 29, 2022, the Consolidated Appropriations Act was signed into law by former President Biden, which contained, among other things, an identical provision to Accelerating Holding Foreign Companies Accountable Act and amended the Holding Foreign Companies Accountable Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three.
We commenced our business through our subsidiaries in the second half of 2016 and have experienced a period of rapid growth in recent years due to the launch of our subsidiaries’ wealth management services in mid-2017.
We commenced our business through our subsidiaries in the second half of 2016 and have experienced a period of rapid growth in recent years due to the launch of our subsidiaries’ wealth management services in mid-2017. Revenue from wealth management services accounted for the majority of our revenues for the fiscal year ended September 30, 2022.
In addition, such events would cause our subsidiaries’ clients to lose their trust and confidence in our subsidiaries, which may result in a material adverse effect on our subsidiaries’ business and our results of operations and financial condition. 10 We plan to expand our wealth management services through our subsidiaries in the U.S. market.
In addition, such events would cause our subsidiaries’ clients to lose their trust and confidence in our subsidiaries, which may result in a material adverse effect on our subsidiaries’ business and our results of operations and financial condition.
If the product brokers our subsidiaries work with fail to identify and fully appreciate the risks associated with products that are distributed to our clients, or fail to disclose such risks to our subsidiaries’ clients, and as a result our subsidiaries’ clients suffer financial loss or other damages resulting from their purchase of the wealth management products following our recommendation of the product brokers, our reputation, client relationships, business and prospects will be materially and adversely affected.
If the product brokers our subsidiaries work with fail to identify and fully appreciate the risks associated with products that are distributed to our clients, or fail to disclose such risks to our subsidiaries’ clients, and as a result our subsidiaries’ clients suffer financial loss or other damages resulting from their purchase of the wealth management products following our recommendation of the product brokers, our reputation, client relationships, business and prospects will be materially and adversely affected. 10 Any failure to ensure and protect the confidentiality of the personal data of our subsidiaries’ clients could lead to legal liability, adversely affect our reputation and have a material adverse effect on our subsidiaries’ business and our financial condition or results of operations.
However, as a majority of the clients of our subsidiaries’ wealth management services and asset management services are nationals of mainland China or residents in mainland China and our principal executive offices are located, and our subsidiaries operate in Hong Kong, a special administrative region of China, there is no guarantee that if certain existing or future PRC laws become applicable to our subsidiaries, it will not have a material adverse impact on our subsidiaries’ business, financial condition and results of operations and/or our ability to offer or continue to offer securities to investors. 1 Except for the Basic Law of the Hong Kong Special Region of the People ’ s Republic of China (“Basic Law”), national laws of mainland China (“National Laws”) do not apply in Hong Kong unless they are listed in Annex III of the Basic Law and applied locally by promulgation or local legislation.
However, as a majority of the clients of our subsidiaries’ wealth management services and asset management services are nationals of mainland China or residents in mainland China and our principal executive offices are located, and our subsidiaries operate in Hong Kong, a special administrative region of China, there is no guarantee that if certain existing or future PRC laws become applicable to our subsidiaries, it will not have a material adverse impact on our subsidiaries’ business, financial condition and results of operations and/or our ability to offer or continue to offer securities to investors.
Other risk management methods depend upon the evaluation of information regarding markets, clients, catastrophe occurrence or other matters that are publicly available or otherwise accessible to us, which may not always be accurate, complete, up-to-date or properly evaluated. 13 Moreover, we are subject to the risks of errors and misconduct by our and our subsidiaries’ employees, which include: ● engaging in misrepresentation or fraudulent activities when our subsidiaries market our brand as a wealth management service provider to clients and potential clients; ● improperly using or disclosing confidential information of our subsidiaries’ clients, third-party wealth management product brokers or providers or other parties; ● concealing unauthorized or unsuccessful activities; or ● otherwise not complying with laws and regulations or our internal policies or procedures.
Moreover, we are subject to the risks of errors and misconduct by our and our subsidiaries’ employees, which include: ● engaging in misrepresentation or fraudulent activities when our subsidiaries market our brand as a wealth management service provider to clients and potential clients; ● improperly using or disclosing confidential information of our subsidiaries’ clients, third-party wealth management product brokers or providers or other parties; ● concealing unauthorized or unsuccessful activities; or ● otherwise not complying with laws and regulations or our internal policies or procedures.
Our subsidiaries currently hold the following licenses, through PAM, from the SFC: (i) SFO Type 4 License, effective as of November 15, 2016, for conducting regulated activities related to advising on securities; and (ii) SFO Type 9 License, effective as of November 15, 2016, for conducting regulated activities related to asset management.
Our subsidiaries held the following licenses, through PAM, from the SFC: (i) SFO Type 4 License, for conducting regulated activities related to advising on securities; and (ii) SFO Type 9 License, for conducting regulated activities related to asset management, until December 2024.
If our subsidiaries fail to attract and retain qualified employees to manage their client relationships, our subsidiaries’ business could suffer. Our subsidiaries’ employees who manage client relationships are responsible for maintaining relationships with our subsidiaries’ clients, such as serving as these clients’ day-to-day contacts and carrying out a substantial portion of the client services our subsidiaries deliver.
Our subsidiaries’ employees who manage client relationships are responsible for maintaining relationships with our subsidiaries’ clients, such as serving as these clients’ day-to-day contacts and carrying out a substantial portion of the client services our subsidiaries deliver. Their professional competence and approachability are essential to establishing and maintaining our brand image.
We cannot assure you that the oversight will not be extended to companies operating in Hong Kong like us and any such action may significantly limit or completely hinder our ability to offer or continue to offer our securities to investors, result in a material adverse change to our subsidiaries’ business operations, including our subsidiaries’ Hong Kong operations, and damage our reputation.
We cannot assure you that the oversight will not be extended to companies operating in Hong Kong like us and any such action may significantly limit or completely hinder our ability to offer or continue to offer our securities to investors, result in a material adverse change to our subsidiaries’ business operations, including our subsidiaries’ Hong Kong operations, and damage our reputation. 1 Our subsidiaries’ business, our financial condition and results of operations, and/or the value of our Ordinary Shares or our ability to offer or continue to offer securities to investors may be materially and adversely affected by existing or future PRC laws and regulations which may become applicable to our subsidiaries.
In the event that the fund that our subsidiaries manage were to perform poorly, our revenue, income and cash flow could decline. Poor performance of our subsidiaries’ investment fund could also make it more difficult for our subsidiaries to raise new capital. Investors might decline to invest in future investment funds our subsidiaries raise.
Poor performance of our subsidiaries’ investment fund could also make it more difficult for our subsidiaries to raise new capital. Investors might decline to invest in future investment funds our subsidiaries raise.
Competition for relationship managers may also force our subsidiaries to increase the compensation of their client relationship managers, which would increase operating costs and reduce our profitability. 8 If any insurance products distributed by the product brokers our subsidiaries work with or our subsidiaries’ business practices or the business practices of any of the product brokers our subsidiaries work with are deemed to violate any new or existing Hong Kong laws or regulations, our subsidiaries’ business and our financial condition and results of operations could be materially and adversely affected.
If any insurance products distributed by the product brokers our subsidiaries work with or our subsidiaries’ business practices or the business practices of any of the product brokers our subsidiaries work with are deemed to violate any new or existing Hong Kong laws or regulations, our subsidiaries’ business and our financial condition and results of operations could be materially and adversely affected.
We rely in part on dividends from our Hong Kong subsidiaries for our cash and financing requirements, such as the funds necessary to service any debt we may incur. 6 There is currently no restriction or limitation under the laws of Hong Kong on the conversion of Hong Kong dollars into foreign currencies and the transfer of currencies out of Hong Kong and the foreign currency regulations of mainland China do not currently have any material impact on the transfer of cash between us and our Hong Kong subsidiaries.
There is currently no restriction or limitation under the laws of Hong Kong on the conversion of Hong Kong dollars into foreign currencies and the transfer of currencies out of Hong Kong and the foreign currency regulations of mainland China do not currently have any material impact on the transfer of cash between us and our Hong Kong subsidiaries.
Their professional competence and approachability are essential to establishing and maintaining our brand image. As our subsidiaries further grow their business and expand into new cities and regions, our subsidiaries have an increasing demand for high quality employees, mainly client relationship managers, who are capable of delivering satisfactory client services.
As our subsidiaries further grow their business and expand into new cities and regions, our subsidiaries have an increasing demand for high quality employees, mainly client relationship managers, who are capable of delivering satisfactory client services. Our subsidiaries have been actively recruiting and will continue to recruit qualified client relationship managers to join them.
As a result, you may only receive a return on your investment in our Ordinary Shares if the market price of our Ordinary Shares increases. 29 If securities or industry analysts do not publish research or reports about our business, or if the publish a negative report regarding our Ordinary Shares, the price of our Ordinary Shares and trading volume could decline.
If securities or industry analysts do not publish research or reports about our business, or if the publish a negative report regarding our Ordinary Shares, the price of our Ordinary Shares and trading volume could decline.
If we were deemed to be an “investment adviser” subject to registration and regulation under the Investment Advisers Act of 1940, as amended (“Advisers Act”) applicable restrictions could make it more difficult for us to continue our business and could have a material adversely impact on our business, operations and financial condition.
Notwithstanding the foregoing, if we were deemed an investment company under the 1940 Act, requirements imposed by the 1940 Act, including limitations on capital structure, ability to transact business with affiliates and ability to compensate key employees, may make it impractical for us to continue our business as currently conducted and materially and adversely affect our business, operations and financial condition. 17 If we were deemed to be an “investment adviser” subject to registration and regulation under the Investment Advisers Act of 1940, as amended (“Advisers Act”) applicable restrictions could make it more difficult for us to continue our business and could have a material adversely impact on our business, operations and financial condition.
GAAP and SEC reporting requirements to strengthen the financial reporting function and set up a financial and system control framework. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for more information. We will be subject to the requirement that we maintain internal controls and that management perform periodic evaluation of the effectiveness of the internal controls.
See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for more information. 22 We will be subject to the requirement that we maintain internal controls and that management perform periodic evaluation of the effectiveness of the internal controls. Effective internal control over financial reporting is important to prevent fraud.
We cannot assure you that PGAM will be able to maintain its status or qualifications as a “Registered Person” under SIBA and comply with the ES Act and associated regulations. PGAM could be regarded as subject to SFC’s regulations and subject to liabilities if PGAM is found in violation of SFC’s regulations.
We cannot assure you that PGAM will be able to maintain its status or qualifications as a “Registered Person” under SIBA and comply with the ES Act and associated regulations. Our Hong Kong subsidiaries may be subject to criminal liabilities as a result of contraventions of regulations related to employment and labor protection in Hong Kong.
Moreover, as our subsidiaries introduce new wealth management services or enter into new markets, our subsidiaries may face unfamiliar market and operational risks and challenges which our subsidiaries may fail to successfully address. We may be unable to manage our growth effectively, which could have a material adverse effect on our subsidiaries’ business.
Moreover, as our subsidiaries introduce new wealth management services or enter into new markets, our subsidiaries may face unfamiliar market and operational risks and challenges which our subsidiaries may fail to successfully address.
If any dispute arises between our current or former officers and us, we may have to incur substantial costs and expenses in order to enforce such agreements in Hong Kong or we may be unable to enforce them at all. 15 Our subsidiaries may fail to obtain and maintain licenses and permits necessary to conduct their operations in Hong Kong or in the Cayman Islands, and our subsidiaries’ business may be materially and adversely affected as a result of any changes in the laws and regulations governing the financial services industry in Hong Kong or the Cayman Islands.
Our subsidiaries may fail to obtain and maintain licenses and permits necessary to conduct their operations in Hong Kong or in the Cayman Islands, and our subsidiaries’ business may be materially and adversely affected as a result of any changes in the laws and regulations governing the financial services industry in Hong Kong or the Cayman Islands.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above. The Initial Public Offering On July 10, 2023, we completed the IPO of 1,000,000 ordinary shares, $0.000625 par value per. The ordinary shares were sold at an offering price of $5.00 per share.
Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above. The Initial Public Offering On July 10, 2023, we completed the IPO of 1,000,000 ordinary shares, $0.000625 par value per share. The ordinary shares were sold at an offering price of $5.00 per share.
Risk Factors — Risks Related to Our Subsidiaries’ Business and Industry — We are subject to concentration risk because we generated the majority of our revenues through a limited number of product brokers and advisory service clients.” For the fiscal year ended September 30, 2022, wealth management services and asset management services contributed to approximately 84.44% and 15.56% of our total revenue, respectively.
Risk Factors — Risks Related to Our Subsidiaries’ Business and Industry — We are subject to concentration risk because we generated the majority of our revenues through a limited number of product brokers and advisory service clients.” 37 For the fiscal year ended September 30, 2022, wealth management services and asset management services contributed to approximately 84.44% and 15.56% of our total revenue, respectively.
The percentages shown on the following chart represent percentages of equity ownership: Emerging Growth Company Status As a company with less than US$1.235 billion in revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act.
The percentages shown on the following chart represent percentages of equity ownership: 32 Emerging Growth Company Status As a company with less than US$1.235 billion in revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act.
Accordingly, Cayman Islands managers and advisers will generally not be required to register with the IRS and report on their own account. They may, however, be required to self-certify as non-financial foreign entities. 62 Cayman Islands reporting financial institutions (“FIs”) are required to have a Global Intermediary Identification Number (“GIIN”) directly from the IRS.
Accordingly, Cayman Islands managers and advisers will generally not be required to register with the IRS and report on their own account. They may, however, be required to self-certify as non-financial foreign entities. Cayman Islands reporting financial institutions (“FIs”) are required to have a Global Intermediary Identification Number (“GIIN”) directly from the IRS.
PGA was incorporated in the Cayman Islands as an exempted company in February 2017. PGA is a FOF that invests in top ranked hedge funds with managed assets ranging from $2 billion to $20 billion based upon our subsidiaries’ fund selection models. The underlying hedge funds we invest in are chosen based upon our subsidiaries’ fund selection models.
PGA was incorporated in the Cayman Islands as an exempted company in February 2017. PGA was a FOF that invests in top ranked hedge funds with managed assets ranging from $2 billion to $20 billion based upon our subsidiaries’ fund selection models. The underlying hedge funds we invest in are chosen based upon our subsidiaries’ fund selection models.
As part of this partnership, our subsidiaries host wealth management themed networking events for their high net worth members. We intend to enhance our brand recognition to attract potential high net worth and ultra-high net worth clients through our subsidiaries’ broad client network and a variety of online marketing channels.
As part of this partnership, our subsidiaries host wealth management themed networking events for their high net worth members. 52 We intend to enhance our brand recognition to attract potential high net worth and ultra-high net worth clients through our subsidiaries’ broad client network and a variety of online marketing channels.
Through collaboration with certain private banks, our subsidiaries are also able to more effectively compete by having access to such private banking clients. 53 ● Insurance companies, insurance agents and insurance brokers. Since all products that are offered by the network of intermediaries, our subsidiaries refer their clients to are currently insurance products.
Through collaboration with certain private banks, our subsidiaries are also able to more effectively compete by having access to such private banking clients. ● Insurance companies, insurance agents and insurance brokers. Since all products that are offered by the network of intermediaries, our subsidiaries refer their clients to are currently insurance products.
In addition to insurance products, we intend to expand the network of product brokers our subsidiaries work with to provide clients with access to other types of wealth management products. 33 ● Asset management services. PAI and its subsidiaries provide asset management services to their clients acting as investment advisors and fund managers.
In addition to insurance products, we intend to expand the network of product brokers our subsidiaries work with to provide clients with access to other types of wealth management products. ● Asset management services. PAI and its subsidiaries provide asset management services to their clients acting as investment advisors and fund managers.
Certain categories of taxpayers (for example, financial institutions, insurance companies and securities dealers) are likely to be regarded as deriving trading gains rather than capital gains unless these taxpayers can prove that the investment securities are held for long-term investment purposes. 58 Stamp duty Hong Kong stamp duty, currently charged at the ad valorem rate of 0.1% on the higher of the consideration for or the market value of the shares, will be payable by the purchaser on every purchase and by the seller on every sale of Hong Kong shares (in other words, a total of 0.2% is currently payable on a typical sale and purchase transaction of Hong Kong shares).
Certain categories of taxpayers (for example, financial institutions, insurance companies and securities dealers) are likely to be regarded as deriving trading gains rather than capital gains unless these taxpayers can prove that the investment securities are held for long-term investment purposes. 57 Stamp duty Hong Kong stamp duty, currently charged at the ad valorem rate of 0.1% on the higher of the consideration for or the market value of the shares, will be payable by the purchaser on every purchase and by the seller on every sale of Hong Kong shares (in other words, a total of 0.2% is currently payable on a typical sale and purchase transaction of Hong Kong shares).
Under the EO, an employee is generally entitled to, amongst other things, notice of termination of his or her employment contract; payment in lieu of notice; maternity protection in the case of a pregnant employee; not less than one rest day in every period of seven days; severance payments or long service payments; sickness allowance; statutory holidays or alternative holidays; and paid annual leave of up to 14 days depending on the period of employment. 57 Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong) The Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong), or the ECO, is an ordinance enacted for the purpose of providing for the payment of compensation to employees injured in the course of employment.
Under the EO, an employee is generally entitled to, amongst other things, notice of termination of his or her employment contract; payment in lieu of notice; maternity protection in the case of a pregnant employee; not less than one rest day in every period of seven days; severance payments or long service payments; sickness allowance; statutory holidays or alternative holidays; and paid annual leave of up to 14 days depending on the period of employment. 56 Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong) The Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong), or the ECO, is an ordinance enacted for the purpose of providing for the payment of compensation to employees injured in the course of employment.
On or before 31 July each year, a Cayman Islands Reporting FI will also be required to report certain information in respect of each of its “reportable accounts” to the TIA. 63 Regulations Related to our Business Operation in the U.S.
On or before 31 July each year, a Cayman Islands Reporting FI will also be required to report certain information in respect of each of its “reportable accounts” to the TIA. Regulations Related to our Business Operation in the U.S.
On November 20, 2018, pursuant to a contribution agreement dated of even date, we issued an additional 3,000,000 Ordinary Shares to Prestige Financial Holdings Group Limited as consideration for the Company’s purchase of 100% of the issued shares of PPWM.
On November 20, 2018, pursuant to a contribution agreement dated of even date, we issued an additional 3,000,000 Ordinary Shares to Prestige Financial Holdings Group Limited (“PFHGL”) as consideration for the Company’s purchase of 100% of the issued shares of PPWM.
CIMA is empowered to require that entities registered as registered persons have their AML/CTF/CPF systems and Procedures audited by suitably qualified entities to check for compliance with the Regulations. 61 While the ultimate responsibility for maintaining and implementing satisfactory Procedures remains with the SIBA entity, the obligations may be met by delegating or outsourcing those functions, including to persons who are subject to the anti-money laundering requirements of a country assessed as having a low risk of money laundering, terrorist financing and proliferation financing.
CIMA is empowered to require that entities registered as registered persons have their AML/CTF/CPF systems and Procedures audited by suitably qualified entities to check for compliance with the Regulations. 60 While the ultimate responsibility for maintaining and implementing satisfactory Procedures remains with the SIBA entity, the obligations may be met by delegating or outsourcing those functions, including to persons who are subject to the anti-money laundering requirements of a country assessed as having a low risk of money laundering, terrorist financing and proliferation financing.
After these transactions, the Company became the holding company of PPWM and PAI. The Company owns 100% of the issued shares of PPWM, a company incorporated in the British Virgin Islands on May 23, 2014. PPWM owns 100% of the issued shares of PWM, a company incorporated in Hong Kong on January 26, 2015.
After these transactions, the Company became the holding company of PPWM and PAI. 31 The Company owns 100% of the issued shares of PPWM, a company incorporated in the British Virgin Islands on May 23, 2014. PPWM owns 100% of the issued shares of PWM, a company incorporated in Hong Kong on January 26, 2015.
Asset Management Fund in Operation For our subsidiaries’ asset management operations, our subsidiaries have two dedicated professionals in the field of quantitative investment, risk management and macroeconomic research, and one professional in the field of securities investment. Our subsidiaries’ investment committee comprises of our Chief Executive Officer and the three professionals.
Asset Management Fund For our subsidiaries’ asset management operations, our subsidiaries have two dedicated professionals in the field of quantitative investment, risk management and macroeconomic research, and one professional in the field of securities investment. Our subsidiaries’ investment committee comprises of our Chief Executive Officer and the three professionals.
PGA is a FOF whose objective is to achieve superior capital growth by investing in hedge funds managed by world-class quantitative portfolio managers. For PGA, we charge investors performance fees, management fees and subscription fees.
PGA PGA was a FOF whose objective is to achieve superior capital growth by investing in hedge funds managed by world-class quantitative portfolio managers. For PGA, we charge investors performance fees, management fees and subscription fees.
However, trading gains from the sale of shares by persons carrying on a trade, profession or business in Hong Kong, where such gains are derived from or arise in Hong Kong, will be subject to Hong Kong profits tax which is imposed at the rates of 8.25% on assessable profits up to HK$2,000,000 (approximately US$255,000) and 16.5% on any part of assessable profits over HK$2,000,000 (approximately US$255,000) on corporations from the year of assessment of 2018/2019 onwards.
However, trading gains from the sale of shares by persons carrying on a trade, profession or business in Hong Kong, where such gains are derived from or arise in Hong Kong, will be subject to Hong Kong profits tax which is imposed at the rates of 8.25% on assessable profits up to HK$2,000,000 (approximately US$256,000) and 16.5% on any part of assessable profits over HK$2,000,000 (approximately US$256,000) on corporations from the year of assessment of 2018/2019 onwards.
Our subsidiaries may fail to obtain and maintain licenses and permits necessary to conduct their operations in Hong Kong, and our subsidiaries’ business may be materially and adversely affected as a result of any changes in the laws and regulations governing the financial services in Hong Kong.” Regulations related to our Asset Management Services and Related Advisory Services The SFC authorizes corporations and individuals through licenses to act as financial intermediaries.
Our subsidiaries may fail to obtain and maintain licenses and permits necessary to conduct their operations in Hong Kong, and our subsidiaries’ business may be materially and adversely affected as a result of any changes in the laws and regulations governing the financial services in Hong Kong. 54 Regulations related to our Asset Management Services and Related Advisory Services The SFC authorizes corporations and individuals through licenses to act as financial intermediaries.
For the fiscal year ended September 30, 2022, our wealth management revenue were generated from the referral fees recognized upon policy origination, with a fee range of 2% to 14% and an average fee rate of approximately 6.11% and we did not generate wealth management revenue from policy renewals in the same period.
For the fiscal year ended September 30, 2022, our wealth management revenue was generated from the referral fees recognized upon policy origination, with a fee range of 2% to 14% and an average fee rate of approximately 6.11% and we did not generate wealth management revenue from policy renewals in the same period.
PGA is a FOF that invest in other hedge funds with a quantitative strategy. As the manager of PGA, PGAM decides the investment allocation of PGA according to market conditions and the needs and risk profiles of our subsidiaries’ clients. We derive revenues via subscription fees, management fees, and performance commissions from our subsidiaries’ funds.
PGA was a FOF that invest in other hedge funds with a quantitative strategy. As the manager of PGA, PGAM decides the investment allocation of PGA according to market conditions and the needs and risk profiles of our subsidiaries’ clients. We derive revenues via subscription fees, management fees, and performance commissions from our subsidiaries’ funds.
Integrate resources and provide one-stop wealth preservation and management solution Our subsidiaries have collected and consolidated a database of high quality and suitable tax experts, lawyers, trust consultants and other wealth preservation and management industry experts who are able to provide professional, objective and alternative solutions to clients that our subsidiaries refer.
Integrate resources and provide one-stop technology-oriented wealth preservation and management solution Our subsidiaries have collected and consolidated a database of high quality and suitable tax experts, lawyers, trust consultants and other wealth preservation and management industry experts who are able to provide professional, objective and alternative solutions to clients that our subsidiaries refer.
Meanwhile, there were also 40 policy renewals with premiums in the amount of $5,780,829 paid by clients in the fiscal year 2021, and referral fee revenues of $45,307 for these policy renewals had been recognized at the same time of their policy originations in prior years.
Meanwhile, there were also 40 policy renewals with premiums in the amount of $5,780,829 paid by clients in the fiscal year 2023, and referral fee revenues of $45,307 for these policy renewals had been recognized at the same time of their policy originations in prior years.
Any employer who, without reasonable cause, contravenes this requirement commits a criminal offence and is liable on conviction to a fine of HK$350,000 (approximately $44,700) and imprisonment for three years, and to a daily penalty of HK$500 (approximately $64) for each day on which the offence is continued.
Any employer who, without reasonable cause, contravenes this requirement commits a criminal offence and is liable on conviction to a fine of HK$350,000 (approximately $44,800) and imprisonment for three years, and to a daily penalty of HK$500 (approximately $64) for each day on which the offence is continued.
We believe that our management team’s insightful industry knowledge and vision, and strong execution capabilities significantly contribute to our growth. 37 Our Growth Strategies We aspire to, through our subsidiaries, become a trusted wealth management services brand among Asia’s high net worth individuals.
We believe that our management team’s insightful industry knowledge and vision, and strong execution capabilities will significantly contribute to our growth. Our Growth Strategies We aspire to, through our subsidiaries, become a trusted wealth management services brand among Asia’s high net worth individuals.
When existing clients purchase multiple insurance policies, our subsidiaries are entitled to referral fees on each of those policies. 18 clients out of the total 46 clients have purchased multiple insurance policies from brokers our subsidiaries work with, not limited to savings plans.
When existing clients purchase multiple insurance policies, our subsidiaries are entitled to referral fees on each of those policies. 18 clients out of the total 47 clients have purchased multiple insurance policies from brokers our subsidiaries work with, not limited to savings plans.
Currently, we own one registered trademark in Hong Kong, “Prestige.” Marketing and Brand Promotion Word-of-mouth is currently one of the most effective marketing tools for our subsidiaries’ business and we believe that for all our subsidiaries’ business operations, approximately 54%, 30%, and 100% of our subsidiaries’ clients have come through referrals from existing clients in the fiscal years ended September 30, 2021, 2022 and 2023, respectively.
Currently, we own one registered trademark in Hong Kong, “Prestige.” Marketing and Brand Promotion Word-of-mouth is currently one of the most effective marketing tools for our subsidiaries’ business and we believe that for all our subsidiaries’ business operations, approximately 30%, 100%, and 100% of our subsidiaries’ clients have come through referrals from existing clients in the fiscal years ended September 30, 2022, 2023 and 2024, respectively.
For the fiscal years ended September 30, 2021 and 2022, due to the travel restrictions in response to the COVID-19 pandemic, our subsidiaries’ clients could not visit Hong Kong in person to complete required physical examination and get their policies such as savings plan policies, approved by the insurance company.
For the fiscal year ended September 30, 2022, due to the travel restrictions in response to the COVID-19 pandemic, our subsidiaries’ clients could not visit Hong Kong in person to complete required physical examination and get their policies such as savings plan policies, approved by the insurance company.
Because the Company has not officially started the proceedings after the “Letters before Action”, the Company still reserves available legal means of collection. Therefore, as of September 30, 2023, the Company did not write off the prepaid deposit for acquisition. 54 Seasonality Our subsidiaries currently do not experience seasonality in their operations.
Because the Company has not officially started the proceedings after the “Letters before Action”, the Company still reserves available legal means of collection. Therefore, as of September 30, 2024, the Company did not write off the prepaid deposit for acquisition. Seasonality Our subsidiaries currently do not experience seasonality in their operations.
On December 27, 2018, pursuant to a share exchange agreement dated of even date, we issued an aggregate of 1,000,000 Ordinary Shares to all the shareholders of PAI, with 906,582 Ordinary Shares issued to Prestige Financial Holdings Group Limited, 40,870 Ordinary Shares issued to Kington International Holdings Limited, 23,355 Ordinary Shares issued to Ensight Holdings Limited, and 29,193 Ordinary Shares issued to Pikachu Holdings Limited, as consideration for the Company’s purchase of 100% of the issued shares of PAI from those shareholders.
On December 27, 2018, pursuant to a share exchange agreement dated of even date, we issued an aggregate of 1,000,000 Ordinary Shares to all the shareholders of PAI, with 906,582 Ordinary Shares issued to PFHGL, 40,870 Ordinary Shares issued to Kington International Holdings Limited, 23,355 Ordinary Shares issued to Ensight Holdings Limited, and 29,193 Ordinary Shares issued to Pikachu Holdings Limited, as consideration for the Company’s purchase of 100% of the issued shares of PAI from those shareholders.
PGA’s one-off subscription fees at the time of subscription range from 0.85% to 1.25%, annual management fees range from 1.00% to 1.50%, and performance fees are at 10% to 13.5% of the incremental portion on a quarterly basis over the high-water mark, net of other expenses.
PGA’s one-off subscription fees at the time of subscription ranged from 0.85% to 1.25%, annual management fees ranged from 1.00% to 1.50%, and performance fees were at 10% to 13.5% of the incremental portion on a quarterly basis over the high-water mark, net of other expenses.
On October 1, 2019, we adopted ASC 606 using the modified retrospective method for all contracts not completed as of the date of adoption, and our revenue for the fiscal years ended September 30, 2021, 2022 and 2023 was presented under ASC 606 accordingly.
On October 1, 2019, we adopted ASC 606 using the modified retrospective method for all contracts not completed as of the date of adoption, and our revenue for the fiscal years ended September 30, 2022, 2023 and 2024 were presented under ASC 606 accordingly.
Our subsidiaries’ discretionary account management services contributed to approximately 22.06%, nil, and nil of our revenues for the fiscal years ended September 30, 2021, 2022 and 2023, respectively, and these services were provided to an aggregate of 16 clients from the time our subsidiaries launched these services.
Our subsidiaries’ discretionary account management services contributed to approximately nil, nil, and nil of our revenues for the fiscal years ended September 30, 2022, 2023 and 2024, respectively, and these services were provided to an aggregate of 16 clients from the time our subsidiaries launched these services.
At the Meeting, among other resolutions approved, the shareholders of the Company adopted the following resolutions: (i) the increase of the Company’s authorized share capital from US$100,000 divided into 160,000,000 ordinary shares of par value US$0.000625 each, to US$1,000,000 divided into 1,600,000,000 Ordinary Shares of par value US$0.000625 each; (ii) the re-designation and re-classification of shares of the Company that: (a) the issued 9,150,000 Ordinary Shares be and are re-designated and re-classified into Class A Ordinary Shares of par value US$0.000625 each with 1 vote per share on a one for one basis, and (b) the remaining authorized but unissued Ordinary Shares be and are re-designated and re-classified into (i) 1,430,850,000 Class A Ordinary Shares on a one for one basis and (ii) 160,000,000 Class B ordinary shares of par value US$0.000625 each with 20 votes per share on a one for one basis; and (iii) the adoption of the Second Amended and Restated Memorandum and Articles of Association of the Company.
At the Meeting, among other resolutions approved, the shareholders of the Company adopted the following resolutions: (i) the increase of the Company’s authorized share capital from US$100,000 divided into 160,000,000 ordinary shares of par value US$0.000625 each, to US$1,000,000 divided into 1,600,000,000 Ordinary Shares of par value US$0.000625 each; (ii) the re-designation and re-classification of shares of the Company that: (a) the issued 9,150,000 Ordinary Shares be and are re-designated and re-classified into Class A Ordinary Shares of par value US$0.000625 each with 1 vote per share on a one for one basis, and (b) the remaining authorized but unissued Ordinary Shares be and are re-designated and re-classified into (i) 1,430,850,000 Class A Ordinary Shares on a one for one basis and (ii) 160,000,000 Class B ordinary shares of par value US$0.000625 each with 20 votes per share on a one for one basis; and (iii) the adoption of the Second Amended and Restated Memorandum and Articles of Association of the Company. 33 On January 19, 2024, the Company filed the Second Amended and Restated Memorandum and Articles of Association with the Companies Register of the Cayman Islands.
Meanwhile, PAM closely monitors and manages risks in the investment portfolios for its clients, which include the movements in trading prices of securities in the portfolio, and PAM provides warnings to clients in the event of a significant decrease in the portfolio’s net asset value at the close of market, and disposing of any portion or all the investment deemed as appropriate in the sole discretion of investment manager after the initial public offering.
Meanwhile, PAM closely monitored and managed risks in the investment portfolios for its clients, which include the movements in trading prices of securities in the portfolio, and PAM provided warnings to clients in the event of a significant decrease in the portfolio’s net asset value at the close of market, and disposing of any portion or all the investment deemed as appropriate in the sole discretion of investment manager after the initial public offering.
The following table provides a breakdown of the investment performance and high-water mark of PGA as of the dates indicated: PGA GAV per share High-water mark # of Shares December 31, 2020 85.02 114.67 52,421 March 31, 2021 82.44 114.67 52,421 June 30, 2021 85.05 114.67 52,421 September 30, 2021 87.56 114.67 52,421 December 31, 2021 95.97 114.67 52,421 March 31, 2022 95.83 114.67 52,421 June 30, 2022 98.67 114.67 52,421 September 30, 2022 86.76 114.67 52,421 December 31, 2022 99.19 114.67 52,421 March 31, 2023 100.52 114.67 52,421 June 30, 2023 96.53 114.67 52,421 September 30, 2023 102.02 114.67 49,946 Selection of Investment Targets With respect to PGA, our subsidiaries carefully select the underlying funds as investment targets to PGA based upon quantitative and qualitative analysis.
The following table provides a breakdown of the investment performance and high-water mark of PGA as of the dates indicated: PGA GAV per share High-water mark # of Shares December 31, 2021 95.97 114.67 52,421 March 31, 2022 95.83 114.67 52,421 June 30, 2022 98.67 114.67 52,421 September 30, 2022 86.76 114.67 52,421 December 31, 2022 99.19 114.67 52,421 March 31, 2023 100.52 114.67 52,421 June 30, 2023 96.53 114.67 52,421 September 30, 2023 102.02 114.67 49,946 December 31, 2023 102.76 114.67 49,946 March 28, 2024 105.05 114.67 49,946 49 Selection of Investment Targets With respect to PGA, our subsidiaries carefully select the underlying funds as investment targets to PGA based upon quantitative and qualitative analysis.
Shi for client acquisition. In the fiscal years ended September 30, 2021, 2022 and 2023, our subsidiaries had been continuously expanding their referral networks to private banks, chambers of commerce and industry associations, as these entities typically have strong connections with their high net worth and ultra-high net worth clients or members.
In the fiscal years ended September 30, 2022, 2023 and 2024, our subsidiaries had been continuously expanding their referral networks to private banks, chambers of commerce and industry associations, as these entities typically have strong connections with their high net worth and ultra-high net worth clients or members.
PPWM owns 100% of the issued shares of PWAI, a corporation incorporated in California on February 15, 2022. The Company also owns 100% of the issued shares of PAI, a company incorporated in the British Virgin Islands on December 4, 2015. PAI owns 100% of the issued shares of PAM, a company incorporated in Hong Kong on December 14, 2015.
PPWM owns 100% of the issued shares of PWAI, a corporation incorporated in California on February 15, 2022. The Company also owns 100% of the issued shares of PAI, a company incorporated in the British Virgin Islands on December 4, 2015.
We also intend to offer other value-added services through our subsidiaries that are highly sought after among high net worth and ultra-high net worth individuals including but not limited to study tours to global financial institution, art finance tours, wealth inheritance lectures, and preservation lectures.
We also intend to offer other value-added services through our subsidiaries that are highly sought after among high net worth and ultra-high net worth individuals, including but not limited to study tours to global financial institution, art finance tours, wealth inheritance lectures, and artificial intelligence-based promotion activities.
Among those clients, 35 clients out of the 46 wealth management clients have purchased 45 savings plan insurance policy from brokers our subsidiaries work with, with seven clients having purchased multiple savings plans.
Among those clients, 36 clients out of the 47 wealth management clients have purchased 46 savings plan insurance policy from brokers our subsidiaries work with, with seven clients having purchased multiple savings plans.
For the years ended September 30, 2021, 2022 and 2023, our subsidiaries provided wealth management services to three, three and ten clients, respectively, and we generated revenue from wealth management services in the amount of $1,833, $1,760,760, and $76,338, respectively.
For the years ended September 30, 2022, 2023 and 2024, our subsidiaries provided wealth management services to three, ten and three clients, respectively, and we generated revenue from wealth management services in the amount of $1,760,760, $76,338, and $13,505, respectively.
Asset Management Related Advisory Services Ongoing Advisory Services With respect to ongoing advisory services, which constitute regulated activities related to asset management, our asset management advisors provide services through PAM, our wholly owned subsidiary in Hong Kong, which holds valid SFC Type 4 License and Type 9 License in Hong Kong.
Asset Management Related Advisory Services Ongoing Advisory Services With respect to ongoing advisory services, which constitute regulated activities related to asset management, our asset management advisors provide services through PAM, our wholly owned subsidiary in Hong Kong, which held valid SFC Type 4 License and Type 9 License in Hong Kong until August 2024.
For the fiscal year ended September 30, 2023, our wealth management revenue decreased significantly since there were fewer clients with willing to purchase insurance products.
For the fiscal years ended September 30, 2023 and 2024, our wealth management revenue decreased significantly since there were fewer clients with willing to purchase insurance products.
As of September 30, 2023, 2022 and 2021, the Company booked the allowance of uncollectible prepaid deposit for acquisition of HK$12 million ($ 1,532,371 , $1,525,165, and $1,540,832, respectively). The Company is preparing to initiate arbitration proceedings in an attempt to collect the prepaid balance.
As of September 30, 2024, 2023 and 2022, the Company booked the allowance of uncollectible prepaid deposit for acquisition of HK$12 million ($1,543,210, $1,532,371, and $1,525,165, respectively). The Company is preparing to initiate arbitration proceedings in an attempt to collect the prepaid balance.
With respect to our subsidiaries’ asset management services, their fund selection models choose global asset management products from their database that includes over 150 carefully-selected top ranking hedge funds with superior reputation and outstanding investment records, which are then vetted and approved by our subsidiaries’ investment committee.
With respect to our subsidiaries’ asset management services, their fund selection models choose global asset management products from their database that includes over 150 carefully-selected top ranking hedge funds with superior reputation and outstanding investment records, which are then vetted and approved by our subsidiaries’ investment committee. 39 Experienced Management Team We have a highly experienced management team.
For the fiscal years ended September 30, 2021, 2022, and 2023, through PAM, we provided ongoing advisory services to one, two and one investment companies, with revenue from advisory service fees of $419,554, $274,904, and $221,119, respectively.
For the fiscal years ended September 30, 2022, 2023, and 2024, through PAM, we provided ongoing advisory services to two, one, and two investment companies, with revenue from advisory service fees of $274,904, $221,119, and $600,437, respectively.
PAM also assists in the review of randomly selected subscription and redemption documents, provides regulatory updates of relevant Hong Kong laws and offshore jurisdiction laws through our attorneys, maintains database that compares the performances of funds of PAM’s clients and the benchmarks or competitors’ funds, and advises on fund performance improvement.
PAM also assisted in the review of randomly selected subscription and redemption documents, provides regulatory updates of relevant Hong Kong laws and offshore jurisdiction laws through our attorneys, and maintained a database that compares the performances of funds of PAM’s clients and the benchmarks or competitors’ funds, and advised on fund performance improvement.
In early 2017, our subsidiaries started to provide asset management services to their clients. In late 2018, our subsidiaries began providing asset management related advisory services as a type of their asset management services at the request of certain clients.
In late 2018, our subsidiaries began providing asset management related advisory services as a type of their asset management services at the request of certain clients. In late 2020, our subsidiaries started to provide discretionary account management services to our clients as a type of our asset management services.
We generated approximately 60.32% of asset management services revenue from one advisory service client for the fiscal year ended September 30, 2021, approximately 84.71% of that from two advisory service clients for the fiscal year ended September 30, 2022, and approximately 81.24% of that from one advisory service client for the fiscal year ended September 30, 2023.
We generated approximately 84.71% of asset management services revenue from two advisory service clients for the fiscal year ended September 30, 2022, approximately 81.24% of that from one advisory service client for the fiscal year ended September 30, 2023, and approximately 95.85% of that from two advisory service clients for the fiscal year ended September 30, 2024.
To enhance our brand recognition, we plan to continue to focus on client service through rigorous research and due diligence of product brokers. We also intend to continue conducting a wide range of marketing activities through our subsidiaries, including industry conferences, brand marketing workshops as well as client appreciation events.
To enhance our brand recognition, we plan to continue to focus on improving our client services through rigorous research and due diligence of business partners. We also intend to continue conducting a wide range of marketing activities through our subsidiaries, including industry conferences, brand marketing workshops as well as client appreciation events.
On July 20, 2023, the underwriters of the IPO exercised their option to purchase 150,000 additional ordinary shares of the Company, at a price of $5.00 per share (the “Over-allotment Shares”).
On July 20, 2023, the underwriters of the IPO exercised their option to purchase 150,000 additional ordinary shares of the Company, at a price of $5.00 per share (the “Over-allotment Shares”). The closing of the sale of the Over-allotment Shares took place on July 21, 2023.
Furthermore, our directors and executive officers will not be required to report equity holdings under Section 16 of the Exchange Act and will not be subject to the insider short-swing profit disclosure and recovery regime.
We will not be required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers will not be required to report equity holdings under Section 16 of the Exchange Act and will not be subject to the insider short-swing profit disclosure and recovery regime.
We aim at becoming long-term partners to our subsidiaries’ clients in asset allocation and family wealth inheritance. 38 Pursue strategic investments and acquisition opportunities To provide our subsidiaries’ clients with more all-inclusive wealth management services and comprehensive asset management services, our subsidiaries may selectively invest in or acquire companies that are complementary to their business, including opportunities that can further grow our subsidiaries’ current businesses and drive their long-term growth.
Pursue strategic investments and acquisition opportunities To provide our subsidiaries’ clients with more all-inclusive wealth management services and comprehensive asset management services, our subsidiaries may selectively invest in or acquire companies that are complementary to their business, including opportunities that can further grow our subsidiaries’ current businesses and drive their long-term growth.
United Nations (Anti-Terrorism Measures) Ordinance (Chapter 575 of the Laws of Hong Kong) The United Nations (Anti-Terrorism Measures) Ordinance (Chapter 575 of the Laws of Hong Kong), or the UNATMO, provides that it is a criminal offence to: (i) provide or collect funds (by any means, directly or indirectly) with the intention or knowledge that the funds will be used to commit, in whole or in part, one or more terrorist acts; or (ii) make any funds or financial (or related) services available, directly or indirectly, to or for the benefit of a person knowing that, or being reckless as to whether, such person is a terrorist or terrorist associate.
The OSCO extends the money laundering offence to cover the proceeds of all indictable offences in addition to drug trafficking. 58 United Nations (Anti-Terrorism Measures) Ordinance (Chapter 575 of the Laws of Hong Kong) The United Nations (Anti-Terrorism Measures) Ordinance (Chapter 575 of the Laws of Hong Kong), or the UNATMO, provides that it is a criminal offence to: (i) provide or collect funds (by any means, directly or indirectly) with the intention or knowledge that the funds will be used to commit, in whole or in part, one or more terrorist acts; or (ii) make any funds or financial (or related) services available, directly or indirectly, to or for the benefit of a person knowing that, or being reckless as to whether, such person is a terrorist or terrorist associate.
For the fiscal years ended September 30, 2021, 2022, and 2023, PAM provided discretionary account management services to 16, three and three clients, respectively, according to the management agreements PAM signed with them. For the fiscal years ended September 30, 2021, 2022, and 2023, the aggregate original investment amount of our clients was $8,623,724, $nil, and $nil, respectively.
For the fiscal years ended September 30, 2022, 2023, and 2024, PAM provided discretionary account management services to three, three, and two clients, respectively, according to the management agreements PAM signed with them. For the fiscal years ended September 30, 2022, 2023, and 2024, the aggregate original investment amount of our clients was nil, nil, and nil, respectively.
Our subsidiaries’ asset management related advisory services contributed to approximately 15.03%, 13.18%, and 63.45% of our revenues for the fiscal years ended September 30, 2021, 2022 and 2023, respectively, and these services were provided to an aggregate of six clients from the time our subsidiaries launched these services.
Our subsidiaries’ asset management related advisory services contributed to approximately 13.18%, 63.45%, and 93.83% of our revenues for the fiscal years ended September 30, 2022, 2023 and 2024, respectively, and these services were provided to an aggregate of seven clients from the time our subsidiaries launched these services.
Once our subsidiaries’ past or existing clients, or our related parties, connect our subsidiaries with new clients, our subsidiaries’ designated client relationship manager will conduct client onboarding process by introducing our subsidiaries’ services and the product brokers our subsidiaries work with, and collecting preliminary client information.
Sze and our previous Chief Executive Officer, Mr. Shi. Once our subsidiaries’ past or existing clients, or our related parties, connect our subsidiaries with new clients, our subsidiaries’ designated client relationship manager will conduct client onboarding process by introducing our subsidiaries’ services and the product brokers our subsidiaries work with, and collecting preliminary client information.
For the fiscal year ended September 30, 2021, there were three policy originations from our subsidiaries’ clients. Our subsidiary recognized referral fee revenues for only the three policy originations in the amount of $1,833 since these policies are all one-year term products.
For the fiscal year ended September 30, 2023, there were two policy originations from our subsidiaries’ clients. Our subsidiary recognized referral fee revenues for these two policy originations in the amount of $1,471 since these policies are all one-year term products.
Our Value to Our Subsidiaries’ Clients and Value-Added Services Offerings In addition to services related to wealth management product subscriptions and renewals, our subsidiaries also offer a continuum of high-quality value-added services, such as personal assistant services in Hong Kong and the U.S., referrals to and accompanying clients during their visits to suitable wealth planning and inheritance related professionals such as trust lawyers and tax accountants, referrals to scarce high end medical resources, and referrals to agencies specialized in immigration and application to overseas study programs and degree programs.
Our subsidiaries’ services connect the two target groups who would not otherwise interact or work together. 45 Our Value to Our Subsidiaries’ Clients and Value-Added Services Offerings In addition to services related to wealth management product subscriptions and renewals, our subsidiaries also offer a continuum of high-quality value-added services, such as personal assistant services in Hong Kong and the U.S., referrals to and accompanying clients during their visits to suitable wealth planning and inheritance related professionals such as trust lawyers and tax accountants, referrals to scarce high end medical resources, and referrals to agencies specialized in immigration and application to overseas study programs and degree programs.
Meanwhile, there were also 48 policy renewals with premiums in the amount of $7,181,966 paid by clients in the fiscal year 2022, and referral fee revenues of $144,553 for these policy renewals had been recognized at the same time of their policy originations in prior years. 44 For the fiscal year ended September 30, 2023, there were two policy originations from our subsidiaries’ clients.
Meanwhile, there were also 48 policy renewals with premiums in the amount of $7,181,966 paid by clients in the fiscal year 2022, and referral fee revenues of $144,553 for these policy renewals had been recognized at the same time of their policy originations in prior years.
Since the launch of our subsidiaries’ wealth management services to September 30, 2023, 46 clients introduced by our subsidiaries purchased 82 insurance policies in total from the network of brokers our subsidiaries work with.
Since the launch of our subsidiaries’ wealth management services to September 30, 2024, 47 clients introduced by our subsidiaries purchased 85 insurance policies in total from the network of brokers our subsidiaries work with.
PAM also arranges meetings or conference calls for its clients with potential sales distribution channels (such as multi-family offices and other wealth management service companies) or marketing partners to solicit feedback on and improvement suggestions to the expected fund-raising process.
PAM also arranges meetings or conference calls for its clients with potential sales distribution channels (such as multi-family offices and other wealth management service companies) or marketing partners to solicit feedback on and improvement suggestions to the expected fund-raising process. In addition to providing advisory services as needed, PAM also arranges weekly conference calls with clients on progress updates.
The following table sets a movement of AUM of PGA as of the dates indicated.
Assets under Management The following table sets a movement of AUM of PGA as of the dates indicated.
Our net income for the fiscal years ended September 30, 2021 and 2022 were approximately $1.91 million and $1.35 million, respectively, and our net loss for the fiscal years ended September 30, 2023 was approximately $1.03 million.
Our net income for the fiscal year ended September 30, 2022 was approximately $1.35 million, and our net loss for the fiscal years ended September 30, 2023 and 2024 were approximately $1.03 million and $6.82 million, respectively.
We believe our subsidiaries’ clients are loyal to our subsidiaries’ services. This is illustrated in the fiscal years ended September 30, 2021, 2022 and 2023, where approximately 100%, 100% and 100%% of our wealth management revenues come from referrals by existing clients, respectively, demonstrating our client retention and client satisfaction abilities.
This is illustrated in the fiscal years ended September 30, 2022, 2023 and 2024, where approximately 100%, 100% and 100% of our wealth management revenues come from referrals by existing clients, respectively, demonstrating our client retention and client satisfaction abilities.
Revenue generated from our subsidiaries’ asset management business related to fund management amounted to $ 51,071 , $49,614, and $45,324 for the fiscal years ended September 30, 2023, 2022 and 2021, accounting for approximately 14.65%, 2.38%, and 1.62% of our total revenues, respectively.
Revenue generated from our subsidiaries’ asset management business related to fund management amounted to $25,970, $51,071, and $49,614, for the fiscal years ended September 30, 2024, 2023 and 2022, accounting for approximately 4.06%, 14.65%, and 2.38%, of our total revenues, respectively.
In the fiscal years ended September 30, 2021, 2022 and 2023, we generated $1,833, $1,760,760, and $76,338, or, approximately 0.07%, 84.44% and 21.90% of our total revenues through our subsidiaries’ wealth management services, respectively.
In the fiscal years ended September 30, 2022, 2023 and 2024, we generated $1,760,760, $76,338, and $13,505, or, approximately 84.44%, 21.90%, and 2.11% of our total revenues through our subsidiaries’ wealth management services, respectively.
Our subsidiaries’ clients also have on average, minimum investable assets worth $5 million. We believe the influence and both the personal and professional networks of our subsidiaries’ existing clients provide our subsidiaries with access to a larger network of prospective clients who are high net worth or ultra-high net worth individuals.
We believe the influence and both the personal and professional networks of our subsidiaries’ existing clients provide our subsidiaries with access to a larger network of prospective clients who are high net worth or ultra-high net worth individuals.
For the years ended September 30, 2021, 2022 and 2023, our subsidiaries provided asset management services to 21, seven and six clients, respectively, and generated revenue from asset management services in the amount of $2,790,346, $324,518 and $272,190, respectively.
For the years ended September 30, 2022, 2023 and 2024, our subsidiaries provided asset management services to seven, six, and five clients, respectively, and generated revenue from asset management services in the amount of $324,518, $272,190, and $626,407, respectively.
The referral fees of the two one-year term policies are calculated based upon their total policy premiums in amount of $9,198, which had been paid by clients upon policy originations.
Regarding the three life insurance policies, we only generated referral fees for policy origination. The referral fees of the two one-year term policies are calculated based upon their total policy premiums in amount of $9,198, which had been paid by clients upon policy originations.
Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example, we will not be required to issue quarterly reports or proxy statements. We will not be required to disclose detailed individual executive compensation information.
As a result, we are not subject to the same requirements as U.S. domestic issuers. Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example, we will not be required to issue quarterly reports or proxy statements.
The change from Ordinary Shares to Class A Ordinary Shares reflected with the Nasdaq Capital Market and in the marketplace at the open of business on February 1, 2024, whereupon the Class A Ordinary Shares began trading. B.
The change from Ordinary Shares to Class A Ordinary Shares reflected with the Nasdaq Capital Market and in the marketplace at the open of business on February 1, 2024, whereupon the Class A Ordinary Shares began trading. Entry into Consulting Agreement with Tokyo Bay Management Inc.
Our revenue decreased by approximately 25.32% from approximately $2.79 million in the fiscal year ended September 30, 2021 to approximately $2.09 million in the fiscal year ended September 30, 2022, and decreased by approximately 83.29% to approximately $0.35 million in the fiscal year ended September 30, 2023.
Our revenue decreased by approximately 83.29% from approximately $2.09 million in the fiscal year ended September 30, 2022, to approximately $0.35 million in the fiscal year ended September 30, 2023, and increased by approximately 83.60% to $0.64 million in the fiscal year ended September 30, 2024.
PAM is an SFC types 4 and 9 licensed corporation in Hong Kong and served as investment advisor of PGA. PGAM was incorporated in the Cayman Islands and has been registered as a “Registered Person” with the Cayman Islands Monetary Authority (“CIMA”) under the SIBA.
PAM was an SFC types 4 and 9 licensed corporation in Hong Kong and served as investment advisor of PGA. PGAM was incorporated in the Cayman Islands and has been registered as a “Registered Person” with the Cayman Islands Monetary Authority (“CIMA”) under the SIBA. For the fiscal year ended September 30, 2024, our subsidiaries managed the fund PGA.
Since the launch of our subsidiaries’ wealth management services operation in 2017 to the date of this Annual Report, all product brokers our subsidiaries have worked with have been insurance brokers.
To date, all product brokers that our subsidiaries work with have paid near 100% of the accrued referral fees. 43 Since the launch of our subsidiaries’ wealth management services operation in 2017 to the date of this Annual Report, all product brokers our subsidiaries have worked with have been insurance brokers.
For the fiscal year ended September 30, 2021, our subsidiaries had 21 asset management investors including ten high net worth investors and ten ultra-high net worth investors; our subsidiaries had one enterprise investor through their asset management related advisory services.
For the fiscal year ended September 30, 2024, our subsidiaries had three asset management investors including one high net worth investors and two ultra-high net worth investors; meanwhile, our subsidiaries had two enterprise clients through their asset management related advisory services.
Our subsidiaries continue to focus on referrals as an important avenue of new client development. Since early 2017, approximately 35% of our subsidiaries’ initial clients were introduced to our subsidiaries by our founder, Mr. Sze, and Chief Executive Officer, Mr. Shi. Our subsidiaries are also actively expanding their client referral network and intend to gradually reduce their reliance on Mr.
Our subsidiaries continue to focus on referrals as an important avenue of new client development. Since early 2017, approximately 35% of our subsidiaries’ initial clients were introduced to our subsidiaries by our founder, Mr. Sze, and previous Chief Executive Officer, Mr. Shi.
Accordingly, our subsidiaries work with qualified product brokers who have access to a wide range of products from a selection of product providers and are capable of providing high quality diversification allocation for our subsidiaries’ clients.
Our subsidiaries strive to better meet their clients’ specific and individualized needs by providing their clients with access to diversified product portfolios. Accordingly, our subsidiaries work with qualified product brokers who have access to a wide range of products from a selection of product providers and are capable of providing high quality diversification allocation for our subsidiaries’ clients.
Some of the key differences between FATCA and CRS are as follows: ● CRS is based on tax residency rather than citizenship; ● More Cayman entities will be affected as the scope of applicable exemptions is narrower; ● Thresholds for de minimis financial accounts are significantly reduced under the CRS compared to FATCA; ● The CRS does not impose withholding tax.
Some of the key differences between FATCA and CRS are as follows: ● CRS is based on tax residency rather than citizenship; ● More Cayman entities will be affected as the scope of applicable exemptions is narrower; ● Thresholds for de minimis financial accounts are significantly reduced under the CRS compared to FATCA; ● The CRS does not impose withholding tax. 61 Cayman Islands managers are classified as reporting FIs for CRS purposes and are required to put in place appropriate policies and procedures regarding CRS compliance.
We believe that our subsidiaries have been successful at leveraging the influence and network of their existing clients to grow their client base. 36 Carefully Selected Business Partners such as Product Brokers and Underlying Fund Managers With respect to our subsidiaries’ wealth management services, our subsidiaries carefully select and introduce to their clients highly desirable wealth management brokers who offer products designed to meet the financial and wealth planning needs of high net worth and ultra-high net worth individuals.
Carefully Selected Business Partners such as Product Brokers and Underlying Fund Managers With respect to our subsidiaries’ wealth management services, our subsidiaries carefully select and introduce to their clients highly desirable wealth management brokers who offer products designed to meet the financial and wealth planning needs of high net worth and ultra-high net worth individuals.
For the fiscal year ended September 30, 2023, all our clients were existing clients Our subsidiaries do not enter into service agreements directly with the product brokers’ clients, while our subsidiaries’ clients consent to our subsidiaries’ services upon providing preliminary personal information to our subsidiaries to be passed on to the product brokers.
Our subsidiaries do not enter into service agreements directly with the product brokers’ clients, while our subsidiaries’ clients consent to our subsidiaries’ services upon providing preliminary personal information to our subsidiaries to be passed on to the product brokers.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 65 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 88 ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 94 ITEM 8. FINANCIAL INFORMATION 96 ITEM 9. THE OFFER AND LISTING 96 ITEM 10. ADDITIONAL INFORMATION 96 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 106
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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS The following discussion and analysis of our financial condition and results of operations for the fiscal years ended September 30, 2024, 2023 and 2022 should be read in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report.
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Our consolidated financial statements have been prepared in accordance with U.S. GAAP. Some of the information contained in this discussion and analysis or set forth elsewhere in this annual report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties.
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See “Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements. Actual results and the timing of events could differ materially from those discussed in our forward-looking statements as a result of many factors, including those set forth under “Risk Factors” and elsewhere in this annual report. A.
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Operating Results Overview Through our subsidiaries, we are a wealth management and asset management services provider based in Hong Kong. Our subsidiaries strive to serve their high net worth and ultra-high net worth clients in Asia by identifying wealth management product brokers and underlying investment products to match the wealth management and preservation objectives of their clients.
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Our subsidiaries also provide asset management services and discretionary account management services. Previously, our subsidiaries provided asset management related advisory services by acting as the investment advisor and fund manager for their clients. We believe that our subsidiaries’ wealth management services and asset management services cater to different objectives of their clients.
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We believe our subsidiaries’ clients allocate their funds according to their financial objectives through asset investment or wealth management products such as insurance policies, and thus our subsidiaries’ two operations do not compete with each other. We conduct our operations primarily through our subsidiaries.
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Our Wealth Management Service In 2017, through our subsidiaries, we launched wealth management services to introduce clients to product brokers who distribute a variety of wealth management products, such as insurance policies. The product brokers then customize wealth management investment portfolios to meet the investment and wealth management needs of our subsidiaries’ clients.
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For the fiscal years ended September 30, 2022, 2023 and 2024, all product brokers our subsidiaries worked with were Hong Kong-based or U.S.-based insurance brokers who have access to and distribute a large portfolio of insurance policies from various insurance companies.
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In the fiscal year 2018, through our subsidiaries, we began generating revenues from our wealth management services, in the form of referral fees paid to our subsidiaries directly by insurance brokers.
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Such referral fees paid by third-party insurance brokers are calculated based on the value of insurance premium that our subsidiaries’ clients purchase from insurance brokers that our subsidiaries introduced them to as well as referral fee rate. Our subsidiaries work with a selected group of insurance brokers for their wealth management services.
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Our subsidiaries also deliver to their high net worth and ultra-high net worth clients a continuum of value-added services before, during and after our clients’ purchase of wealth management products from brokers that were introduced by our subsidiaries.
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These value-added services include personal assistant services in Hong Kong, referrals to suitable wealth planning and inheritance related professionals such as trust lawyers and tax accountants, and referrals to renowned high end medical and education resources. Our subsidiaries do not charge their clients fees for these value-added services.
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For the fiscal years ended September 30, 2024, 2023 and 2022, we generated approximately 2.11%, 21.90%, and 84.44% of our total revenues through our subsidiaries’ wealth management services operation, respectively.
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In the fiscal year ended September 30, 2024, we generated 100% of our wealth management services revenue from referral fees as a result of the update of referral service agreements with an insurance broker for referrals in connection with several purchases of saving plan insurance policies and critical illness insurance policies by clients.
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In the fiscal year ended September 30, 2023, we generated 98.07% of our wealth management services revenue from referral fees as a result of the update of referral service agreements with an insurance broker for referrals in connection with several purchases of saving plan insurance policies and critical illness insurance policies by clients.
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In the fiscal year ended September 30, 2022, we generated revenue in the amount of $1,759,451 from wealth management services to clients in the U.S. market.
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Approximately 99.93% of our wealth management services revenue for the same period were referral fees paid to our subsidiaries by an insurance broker in connection with purchases of life insurance policies by a client of our subsidiaries.
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From the launch of our subsidiaries’ wealth management services to September 30, 2024, our subsidiaries provided referrals to insurance brokers that resulted in purchase of an aggregate of 85 insurance policies, of which 46 were savings plan insurance policies, 17 were critical illness insurance policies, 19 were high-end medical insurance policies, and three were life insurance policies. 63 Our subsidiaries support their clients during the origination of the insurance policy products when the clients subscribe to the policies as well as the annual renewals on the policy anniversary dates of each policy and through each policy’s premium payment term.
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On October 1, 2019, we adopted ASC 606 using the modified retrospective method for all contracts not completed as of the date of adoption, and our revenue for the fiscal years ended September 30, 2022, 2023 and 2024 was presented under ASC 606 accordingly.
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As a result of the adoption of ASC 606, revenue from referral fees including referral fees related to policy origination and referral fees for policy renewal were recognized at point-in-time in the stage of policy origination.
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For the fiscal years ended September 30, 2022, 2023 and 2024, all of our wealth management revenue was generated from the referral fees recognized upon policy origination. For the fiscal year ended September 30, 2022, the impact of applying the new revenue standard resulted in a decrease in revenue of $144,553.
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The referral fees were in the range of 2% to 14% with an average fee of approximately 6.11% of the total policy premiums purchased upon policy origination, depending on the specific nature and terms of the policies.
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For the fiscal year ended September 30, 2023, the impact of applying the new revenue standard resulted in a decrease in revenue of $45,307.
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The referral fees were in the range of 14.25% to 14.30% with an average fee of approximately 14.26% of the total policy premiums purchased upon policy origination, depending on the specific nature and terms of the policies.
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For the fiscal year ended September 30, 2024, the impact of applying the new revenue standard resulted in a decrease in revenue of $30,552.
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The referral fees were in the range of 7.81% to 14.25% with an average fee of approximately 8.31% of the total policy premiums purchased upon policy origination, depending on the specific nature and terms of the policies.
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From the launch of our subsidiaries’ wealth management services to September 30, 2024, 36 out of the total 47 wealth management clients have purchased 46 savings plan insurance policies from brokers our subsidiaries work with, with seven clients having purchased multiple savings plans.
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If and when existing clients purchase multiple insurance policies, our subsidiaries would be entitled to additional referral fees. 18 out of the total 47 clients have purchased multiple insurance policies from brokers our subsidiaries work with, not limited to savings plans.
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While we believe existing clients will continue to return to our subsidiaries for purchase of additional insurance policies, there can be no assurance that our subsidiaries’ existing client will do so.
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For the fiscal year ended September 30, 2022, approximately 100% of our subsidiaries’ new clients who contributed approximately 99.93% of our wealth management operation revenue were acquired through the referrals of our subsidiaries’ existing clients. For the fiscal year ended September 30, 2023, all our revenue from our subsidiaries’ wealth management services was generated from existing clients.
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For the fiscal year ended September 30, 2024, all our revenue from our subsidiaries’ wealth management services was generated from existing clients. Our Asset Management Services Through our subsidiaries, we first launched our asset management services operation in early 2017.
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As of September 30, 2024, our subsidiaries managed and advised one fund — PGA, and our subsidiaries used to manage fund PCM1. PGA was incorporated in the Cayman Islands as an exempted company in February 2017. PCM1 is an Exempted Limited Partnership registered in the Cayman Islands in January 2021.
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PGA and PCM1 completed establishment and commenced operations in April 2017 and January 2021, respectively, and PCM1 was fully redeemed by its investors in February 2021.
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For PGA, our main operating activities for operation are carried out through PGAM, our wholly-owned subsidiary, which serves as the manager of the investment fund, and PAM, our wholly-owned subsidiary, which serves as the investment advisor of our investment fund.
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Our subsidiaries charge investors subscription fees, performance fees and management fees in exchange for their services of managing and advising the fund. PGA was set to continue operation unless terminated.
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Our subsidiaries provided asset management related advisory services with respect to the operation and ongoing compliance of investment funds in Hong Kong to certain investment company clients intending to raise funds in Hong Kong.
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Our subsidiaries also provided discretionary account management services to their clients, with PAM as the investment manager. 64 For the fiscal years ended September 30, 2024, 2023 and 2022, we generated approximately 97.89%, 78.10%, and 15.56% of our revenues through our subsidiaries’ asset management services, respectively.
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Factors Affecting Our Results of Operations Expansion of Our Subsidiaries’ Client Base Our revenue growth has been driven significantly by the expansion of our subsidiaries’ client base. In the initial stage of our subsidiaries’ wealth management operation, our subsidiaries’ clients were introduced to our subsidiaries by our related parties and their business networks.
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For the fiscal year ended September 30, 2022, one new wealth management client was acquired through the referrals of our subsidiaries’ existing clients, and the new client contributed to approximately 99.93% of our revenue from referral fees for wealth management services. For the fiscal year ended September 30, 2023, we generated revenues from wealth management services from ten existing clients.
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For the fiscal year ended September 30, 2024, we generated revenues from wealth management services from one new client and two existing clients. In regards to our subsidiaries’ asset management business, five, six, and seven clients contributed to our asset management revenue for the fiscal years ended September 30, 2024, 2023, and 2022.
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We believe that our subsidiaries’ existing clients are highly satisfied with our subsidiaries’ high-quality client services and complementary value-added services. This is evident from the fact that our subsidiaries’ existing clientele has been willing to refer high net worth or ultra-high net worth individuals through word-of-mouth to our subsidiaries as potential clients.
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As such, we believe our subsidiaries’ clients are our brand ambassadors, using their influence in their respective networks to promote our subsidiaries’ services. Moreover, we benefit from the increase in the number of high net worth and ultra-high net worth individuals in mainland China.
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The substantial increase in the number of high net worth and ultra-high net worth individuals in mainland China is expected to fuel the growth of wealth management and asset management services in Hong Kong.
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Hong Kong is the top choice for high net worth and ultra-high net worth individuals in mainland China for management and preservation of their wealth and investments. Hong Kong is considered by high net worth and ultra-high net worth individuals as the ideal spring board to the global financial markets, according to an industry report in 2022.
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As we commenced our operations in the U.S. through our subsidiaries in late 2021, we also expect to benefit from the continued increase in the number of high net worth and ultra-high net worth individuals in the U.S.
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We expect to continue to expand our subsidiaries’ client base through accessing high net worth and ultra-high net worth individuals who are part of the personal and professional networks of our subsidiaries’ existing clients.
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We also intend to continue to participate in a wide array of marketing activities to enhance our brand recognition and to continue to grow our subsidiaries’ business. Underlying Products and Service Mix For our subsidiaries’ wealth management services operation, they identify and screen wealth management product brokers.
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For our subsidiaries’ asset management services operation, they identify and choose asset management products, such as underlying funds, to invest in. We believe the underlying products and service mix affect our revenues and operating profits.
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In the past, our subsidiaries also provided asset management related advisory services to their clients, including advising their clients in setting up new funds and offering ongoing administration and compliance related services to our subsidiaries’ clients.
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The table below sets forth the total revenue generated from different types of products and services that our subsidiaries have, both in absolute amount and as a percentage of the total revenue, during the periods indicated: For the years ended September 30, 2024 % of Revenue 2023 % of Revenue 2022 % of Revenue Wealth management services $ 13,505 2.11 % $ 76,338 21.90 % $ 1,760,760 84.44 % Asset management products and services Asset Management Funds 25,970 4.06 % 51,071 14.65 % 49,614 2.38 % Asset Management Related Advisory Services 600,437 93.83 % 221,119 63.45 % 274,904 13.18 % Subtotal 626,407 97.89 % 272,190 78.10 % 324,518 15.56 % Total net revenue $ 639,912 100.00 % $ 348,528 100.00 % $ 2,085,278 100.00 % 65 The composition and amount of revenues generated from our subsidiaries’ wealth management services and asset management services are affected by the types of services our subsidiaries provide.
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Our subsidiaries earn referral fees substantially all of which are recognized upon policy origination from our subsidiaries’ wealth management services. For the asset management products and discretionary account management services our subsidiaries distribute and provide, our subsidiaries receive both one-off fees and recurring service fees. Historically, we generated the majority of our revenues from wealth management services.
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Through our subsidiaries’ referral services, our subsidiaries’ clients could access highly desirable insurance policies that were not accessible to them.
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From early 2020 to January 8, 2023, due to the travel restrictions and quarantine measures in response to the COVID-19 pandemic, our subsidiaries’ clients were not able to visit Hong Kong in person to complete required physical examinations, a requirement for getting their policies approved by insurance companies.
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Therefore, our subsidiaries materially increased the distribution of their asset management products and services through their investment funds and discretionary account management services, as these services were not affected by the COVID-19, which strategy allowed us to continue generating profits.
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In the fiscal years 2022, 2023 and 2024, our subsidiaries continued to provide asset management related advisory services to investment company clients, and did not provide asset management products and services involving short-term IPO investment strategy, considering of the poor performance of the global capital market in 2022, 2023, and 2024.
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For the fiscal years ended September 30, 2022, 2023 and 2024, our revenues from asset management products and services amounted to approximately $0.3 million, $0.3 million, and $$0.6 million, respectively.
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With respect to our subsidiaries’ wealth management services, our subsidiaries work with product brokers who distribute a variety of wealth management products, and are qualified to provide investment advices and customize wealth management investment portfolios designed to specifically respond to the investment and wealth management needs of our subsidiaries’ clients.
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For the fiscal years ended September 30, 2022, 2023 and 2024, through our subsidiaries, we work with one U.S.-based insurance broker and several existing Hong Kong-based insurance brokers for wealth management services.
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For the fiscal years ended September 30, 2022, 2023 and 2024, our revenues from wealth management services in the U.S. market amounted to approximately $1.76 million, 0.08 million, and 0.01 million, respectively. Our subsidiaries launched their wealth management service business with insurance products because we believe that insurance products meet the wealth management and preservation objectives of our subsidiaries’ clients.
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To successfully subscribe for insurance policies, our subsidiaries’ clients must be first approved by the relevant insurance companies, and then pay the annual premiums and complete the requisite free-look periods.
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The brokers pay our subsidiaries referral fees after the insurance policies of our clients are successfully subscribed and after the expiration of the free-look periods and when the policies are successfully renewed.
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The insurance products purchased by our subsidiaries’ clients primarily include health protection plans and comprehensive disease protection plans, with a significant portion in wealth preservation such as savings plans. Wealth preservation products typically provide long-time compound interests intended to realize wealth preservation and growth.
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As such, our revenues from wealth management services vary by the type of insurance products our subsidiaries’ clients decide to purchase, as the rates for the referral fee our subsidiaries receive from wealth management vary with the types of insurance products purchased by our subsidiaries’ clients through those brokers.
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While a majority of our revenue was generated from referral fees from clients purchasing savings plans, our subsidiaries’ clients selected their policies based upon their investment needs, market conditions and broker recommendations, without any recommendation or advice from our subsidiaries.
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We expect that our plan to increase the number of product producers our subsidiaries work with, therefore increasing and diversifying the types of products that can be subscribed to by our subsidiaries’ clients, will attract more clients to use our subsidiaries’ services.
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Our subsidiaries’ asset management fund, PGA, is a FOF that invests in other underlying funds which are carefully selected and allocated by our subsidiaries’ asset management team and approved by our subsidiaries’ investment committee. For the fiscal year ended September 30, 2024, our subsidiaries managed and advised one fund, PGA.
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PGA invests in a basket of renowned global quantitative hedge funds each with a diversified portfolio of global equities, futures, bonds, and commodities, and aims to deliver high quality risk-adjusted return and high liquidity to investors with a quantitative strategy under prudent and extensive risk management. 66 Additionally, with respect to asset management related advisory services, our subsidiaries’ clients are investment-related enterprises that seek to establish or have recently established investment funds in Hong Kong.
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Our subsidiaries’ clients typically have prior investment experience, or are funds that are newly launched or in the pre-launch phase.
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Our subsidiaries also provide discretionary account management services to clients aiming to provide capital growth by investing in the initial public offering of a target company on the main board of the Hong Kong Stock Exchange, including but not limited to investing as cornerstone investors and/or anchor investors.
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Our subsidiaries charge a one-off subscription fee at the time of subscription, and they are entitled to receive a performance fee in respect of the portfolio as well.
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Operating Costs and Expenses Our operating costs and expenses are comprised of selling, general and administrative expenses, which include wages and salaries, rental fees, general and administrative expenses, share-based compensation, warrants expenses, provisions for credit losses and amortization of right-of-use assets.
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Wages and salaries accounted for approximately 6.11%, 30.56%, and 68.90% of our total selling, general and administrative expenses for the fiscal years ended September 30, 2024, 2023 and 2022, respectively.
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Rental fees accounted for approximately nil, nil, and 4.44% of our total selling, general and administrative expenses for the fiscal years ended September 30, 2024, 2023 and 2022, respectively, while general and administrative expenses accounted for approximately 16.58%, 22.02%, and 23.85% of our total selling, general and administrative expenses, respectively.
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Share-based compensation accounted for approximately 33.85%, nil, and nil of our total selling, general and administrative expenses for the fiscal years ended September 30, 2024, 2023, and 2022 respectively. Warrants expenses accounted for approximately 14.90%, nil, and nil of our total selling, general and administrative expenses for the fiscal years ended September 30, 2024, 2023, and 2022 respectively.
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Provisions for bad debts accounted for approximately 25.99%, 43.04%, and 2.81% of our total selling, general and administrative expenses for the fiscal years ended September 30, 2024, 2023, and 2022 respectively.
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Amortization of right-of-use assets accounted for approximately 2.57%, 4.38%, and nil of our total selling, general and administrative expenses for the fiscal years ended September 30, 2024, 2023 and 2022, respectively.
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Our selling, general and administrative expenses are expected to increase as our subsidiaries intend to recruit additional client relationship managers for their wealth management operation and asset management professionals for their asset management operation, and to incur additional expenses in brand marketing and client experience optimization to match the expansion and growth of our subsidiaries’ business.
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We also expect to incur additional fees and costs related to the growth of our subsidiaries’ business. We also expect to incur additional legal, accounting and other professional service fees, when we become a publicly traded company in the United States. Therefore, our operating costs and expenses are expected to have a significant impact on our results of operations.
Added
Key Components of Consolidated Statements of Comprehensive Income Revenue We generate revenue from our wealth management services and asset management services.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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The audit committee is responsible for, among other things: ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing any audit problems or difficulties and management’s response with the independent auditors; ● discussing the annual audited financial statements with management and the independent auditors; ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions; ● meeting separately and periodically with management and the independent auditors; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
The audit committee is responsible for, among other things: ● appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; ● reviewing any audit problems or difficulties and management’s response with the independent auditors; ● discussing the annual audited financial statements with management and the independent auditors; 88 ● reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; ● reviewing and approving all proposed related party transactions; ● meeting separately and periodically with management and the independent auditors; and ● monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance.
Our directors may exercise all the powers of our company to borrow money, mortgage or charge its undertaking, property and uncalled capital, and to issue debentures or other securities whenever money is borrowed or as security for any debt, liability or obligation of our company or of any third party. Qualification There is currently no shareholding qualification for directors.
Our directors may exercise all the powers of our company to borrow money, mortgage or charge its undertaking, property and uncalled capital, and to issue debentures or other securities whenever money is borrowed or as security for any debt, liability or obligation of our company or of any third party. 87 Qualification There is currently no shareholding qualification for directors.
None of our employees nor our subsidiaries’ employees are represented by unions. We believe that we and our subsidiaries maintain a good working relationship with our employees and we and our subsidiaries have not experienced any significant labor disputes. E. Share Ownership Please refer to “Item 7. Major Shareholders and Related Party Transactions — 7.A. Major Shareholders.”. 93
None of our employees nor our subsidiaries’ employees are represented by unions. We believe that we and our subsidiaries maintain a good working relationship with our employees and we and our subsidiaries have not experienced any significant labor disputes. E. Share Ownership Please refer to “Item 7. Major Shareholders and Related Party Transactions — 7.A. Major Shareholders.”.
Wong worked at Goldman Sachs (Asia) as a business analyst in the investment banking division from 2006 to 2007. Mr. Wong received his bachelor’s degree in Finance and Accounting from The University of British Columbia in 2006 and his master’s degree in Business Administration from The University of Chicago Booth School of Business in 2017. 88 Mr. H.
Wong worked at Goldman Sachs (Asia) as a business analyst in the investment banking division from 2006 to 2007. Mr. Wong received his bachelor’s degree in Finance and Accounting from The University of British Columbia in 2006 and his master’s degree in Business Administration from The University of Chicago Booth School of Business in 2017. Mr. H.
Ngat Wong has served as our Chief Financial Officer since April 2020, and as Chief Operating Officer since February 2019. Mr. Wong had worked with our affiliate, Prestige Financial Holding Group from 2015 to January 2019 as a managing partner focusing on its development. From 2007 to 2015, Mr.
Ngat Wong has served as our Chief Financial Officer since April 2020, and as Chief Operating Officer since February 2019. Mr. Wong had worked with Prestige Financial Holding Group from 2015 to January 2019 as a managing partner focusing on its development. From 2007 to 2015, Mr.
As of September 30, 2023 Senior Management for Wealth Management and Asset Management 2 Asset Management 1 Financial and Administration 1 Total 4 Our subsidiaries pay mandatory provident fund scheme under the MPFSO, and employment injury compensation insurance under the Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong), or ECO, for our employees.
As of September 30, 2024 Senior Management for Wealth Management and Asset Management 2 Asset Management 1 Financial and Administration 1 Total 4 Our subsidiaries pay mandatory provident fund scheme under the MPFSO, and employment injury compensation insurance under the Employees’ Compensation Ordinance (Chapter 282 of the Laws of Hong Kong), or ECO, for our employees.
A director will cease to be a director if, among other things, the director (i) becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors; (ii) dies or becomes of unsound mind, (iii) resigns his or her office by notice in writing to the company, (iv) is prohibited by law from being a director, or (v) ceases to be a director by virtue of any provision of the applicable laws of the Cayman Islands or is removed from the office pursuant to our Amended and Restated Articles of Association.
A director's office will be vacated if, among other things, the director (i) becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors; (ii) dies or becomes of unsound mind, (iii) resigns his or her office by notice in writing to the company, (iv) is prohibited by law from being a director, or (v) ceases to be a director by virtue of any provision of the applicable laws of the Cayman Islands or is removed from the office pursuant to our Second Amended and Restated Articles of Association.
Sherman earned his Master Degree in Business Administration (MBA) from Harvard Business School in 1971 and his Bachelor’s degree in Economics from Brandeis University in 1969. He was Cum Laude with Honors in Economics. Mr. Sherman is a CPA certificate holder. Mr. Adam (Xin) He has served as our independent director since June 2023. Mr.
Sherman earned his master’s degree in business administration (MBA) from Harvard Business School in 1971 and his bachelor’s degree in economics from Brandeis University in 1969. He was Cum Laude with Honors in Economics. Mr. Sherman is a CPA certificate holder. 85 Mr. Adam (Xin) He has served as our independent director since June 2023. Mr.
The compensation committee is responsible for, among other things: ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board with respect to the compensation of our directors; ● reviewing periodically and approving any long-term incentive compensation or equity plans; and ● selecting compensation consultants, legal counsel or other advisors after taking into consideration all factors relevant to that person’s independence from management. 92 Nominating and Corporate Governance Committee.
The compensation committee is responsible for, among other things: ● reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; ● reviewing and recommending to the board with respect to the compensation of our directors; ● reviewing periodically and approving any long-term incentive compensation or equity plans; and ● selecting compensation consultants, legal counsel or other advisors after taking into consideration all factors relevant to that person’s independence from management.
Compensation of Directors and Executive Officers During the fiscal year ended September 30, 2023, we paid an aggregate of approximately US$0.25 million in cash to our directors and executive officers. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers.
Compensation of Directors and Executive Officers During the fiscal year ended September 30, 2024, we paid an aggregate of approximately US$0.33 million in cash to our directors and executive officers. We have not set aside or accrued any amount to provide pension, retirement or other similar benefits to our directors and executive officers.
Sherman has served as Trustee and Chair of Finance Committee for American Academy of Dramatic Arts, the oldest English language acting school in the world, since January 2014, and as Board member. From 2019 to present, Mr. Sherman serves as a director and a member of Audit Committee of NUVVE Holdings Corp.
Sherman has served as Trustee and Chair of Audit Committee for American Academy of Dramatic Arts, the oldest English language acting school in the world, since January 2014, and as Board member. From 2019 to present, Mr. Sherman served as a director and a member of Audit Committee of NUVVE Holdings Corp. (Nasdaq: NVVE). Mr.
Our employment agreement with Mr. Ngat Wong, our CFO and COO, has a term of three years, from April 8, 2020 to April 7, 2023, and provides for an annual salary of $102,000, payable upon the effectiveness of our registration statement on our Form F-1 on June 30, 2023.
Ngat Wong, our CFO and COO, has a term of three years, from April 8, 2020 to April 7, 2023, and provides for an annual salary of $102,000, payable upon the effectiveness of our registration statement on our Form F-1 on June 30, 2023.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual and extraordinary general meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our register of members. 91 Terms of Directors and Executive Officers Each of our directors holds office until a successor has been duly elected and qualified.
The functions and powers of our board of directors include, among others: ● convening shareholders’ annual and extraordinary general meetings; ● declaring dividends and distributions; ● appointing officers and determining the term of office of the officers; ● exercising the borrowing powers of our company and mortgaging the property of our company; and ● approving the transfer of shares in our company, including the registration of such shares in our register of members.
Our nominating and corporate governance committee consists of Adam (Xin) He, H. David Sherman and Junlin Bai. H. David Sherman serves as the chairperson of our nominating and corporate governance committee. Adam (Xin) He, H. David Sherman and Junlin Bai satisfy the “independence” requirements of Section 5605(a)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Securities Exchange Act.
David Sherman and Junlin Bai. Adam (Xin) He serves as the chairman of our audit committee. We have determined that Adam (Xin) He, H. David Sherman and Junlin Bai satisfy the “independence” requirements of Section 5605(a)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Securities Exchange Act.
D. Employees We and our subsidiaries had 4 full-time employees as of September 30, 2023. The table below sets forth the number of our and our subsidiaries’ employees categorized by function as of September 30, 2023. All of our employees and our subsidiaries’ employees are located at our subsidiaries’ only office in Hong Kong.
The table below sets forth the number of our and our subsidiaries’ employees categorized by function as of September 30, 2024. All of our employees and our subsidiaries’ employees are located at our subsidiaries’ only office in Hong Kong.
Hongtao Shi, our Chief Executive Officer, has a term of three years and provides for an annual salary of $120,000, payable upon effectiveness of our registration statement on our Form F-1 on June 30, 2023. The employment agreement has been automatically extended for another three years since the expiration of the initial term on January 31, 2022.
Hongtao Shi, our previous Chief Executive Officer, has a term of three years and provides for an annual salary of $120,000, payable upon effectiveness of our registration statement on our Form F-1 on June 30, 2023.
Name Age Position(s) Hongtao Shi 47 Director, Chairman of the Board of Directors, Chief Executive Officer Chi Tak Sze 74 Director Ngat Wong 40 Chief Financial Officer and Chief Operating Officer H.
Name Age Position(s) Kazuho Komoda 41 Chief Executive Officer, Director, and Chairman of the Board of Director Chi Tak Sze 75 Director Ngat Wong 41 Chief Financial Officer and Chief Operating Officer H.
Sze is the father of Mr. Hongtao Shi, our Chairman and Chief Executive Officer. Mr. Sze is an experienced investor focusing on real estate and financial industry investment. Mr. Sze founded Prestige Financial Holdings Group Limited, a financial service holding company, in 2004 and is the sole director and 100% beneficial owner of Prestige Financial Holdings Group Limited. Mr.
Sze is an experienced investor focusing on real estate and financial industry investment. Mr. Sze founded Prestige Financial Holdings Group Limited, a financial service holding company, in 2004. Mr.
Terms of Directors and Executive Officers Our directors may be elected by a majority of votes of our board of directors present and voting at a board meeting, or by an ordinary resolution of our shareholders. Our directors are not subject to a term of office unless otherwise agreed between us and the directors.
Terms of Directors and Executive Officers Our directors may be elected by a majority of votes of our board of directors present and voting at a board meeting, or by an ordinary resolution of our shareholders. Our directors shall hold office until the expiration of their respective terms or until their successors are elected or appointed.
All of our executive officers are appointed by and serve at the discretion of our board of directors. Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees.
Committees of the Board of Directors We have established three committees under the board of directors: an audit committee, a compensation committee and a nominating and corporate governance committee. We have adopted a charter for each of the three committees. Each committee’s members and functions are described below. Audit Committee. Our audit committee consists of Adam (Xin) He, H.
David Sherman and Junlin Bai satisfy the “independence” requirements of Section 5605(a)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Securities Exchange Act. Our board also has determined that Adam (Xin) He qualifies as an audit committee financial expert within the meaning of the SEC rules or possesses financial sophistication within the meaning of the Nasdaq Listing Rules.
Our board also has determined that Adam (Xin) He qualifies as an audit committee financial expert within the meaning of the SEC rules or possesses financial sophistication within the meaning of the Nasdaq Listing Rules. The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
David Sherman 75 Independent Director Adam (Xin) He 51 Independent Director Junlin Bai 43 Independent Director The following is a brief biography of each of our executive officers, directors, and director appointees: Mr.
David Sherman 76 Independent Director Adam (Xin) He 52 Independent Director Junlin Bai 44 Independent Director 84 The following is a brief biography of each of our executive officers, directors, and director appointees: Mr. Kazuho Komoda served as the Company’s Chief Executive Officer since December 2024 and has been the director and chairman of the board since January 2025. Mr.
Sherman served as director and audit committee chair of Xiao-I Corp (NASDAQ: AIXI), an AI company in Beijing China since May 2023 and Linkage Global Inc. (NASDAQ: LGCB) in Tokyo Japan, a cross-border e-commerce integrated service business since June 2023. Mr.
Sherman is a director and audit committee chair of Xiao-I Corp (NASDAQ: AIXI) an AI company in Beijing China since May 2023 and is director and audit chair of Natures Miracle Holdings, Inc. (NASDAQ: NMHI) is a hydroponic agriculture since March 2024. Mr.
Except for the foregoing, none of the directors, director appointees or executive officers has a family relationship as defined in Item 401 of Regulation S-K.
Bai has been licensed to practice law in China since 2005, and was admitted to the New York State Bar in 2011. Family Relationships None of the directors, director appointees or executive officers has a family relationship as defined in Item 401 of Regulation S-K.
The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
David Sherman and Junlin Bai satisfy the “independence” requirements of Section 5605(a)(2) of the Nasdaq Listing Rules and Rule 10A-3 under the Securities Exchange Act. The nominating and corporate governance committee assists the board of directors in selecting individuals qualified to become our directors and in determining the composition of the board and its committees.
Each committee’s members and functions are described below. Audit Committee. Our audit committee consists of Adam (Xin) He, H. David Sherman and Junlin Bai. Adam (Xin) He serves as the chairman of our audit committee. We have determined that Adam (Xin) He, H.
Nominating and Corporate Governance Committee. Our nominating and corporate governance committee consists of Adam (Xin) He, H. David Sherman and Junlin Bai. H. David Sherman serves as the chairperson of our nominating and corporate governance committee. Adam (Xin) He, H.
Insider Participation Concerning Executive Compensation The compensation committee of the board of directors of the Company will continue to make determinations regarding executive officer compensation. 90 C. Board Practices Board of Directors Our board of directors consists of five directors. A director is not required to hold any shares in our company by way of qualification.
Amendment and Termination of the Plan . The Plan will terminate on the 10 year anniversary of its adoption by the Board (except as to awards outstanding on that date). C. Board Practices Board of Directors Our board of directors consists of five directors. A director is not required to hold any shares in our company by way of qualification.
Removed
Hongtao Shi has served as our director and Chairman since January 2019 and Chief Executive Officer since February 2019, and the chief executive officers of our operating subsidiaries since their inceptions in October 2018. Mr. Shi has more than ten years of managerial and operational experience in the financial services industry. Previously, Mr.
Added
Komoda has more than ten years of experience managerial and operational experience in international business. Mr. Komoda founded Tokyo Bay Management Inc., a wealth management service provided operated in Tokyo in 2024. From 2023 to 2024, Mr. Komoda focused on wealth management business in Japan and accumulated abundant resources in wealth management and family office industry in Japan.
Removed
Shi served as the chief executive officer of Prestige Financial Holdings Group Limited, a financial service holding company in China, since its inception in 2004. Mr. Shi also served as a director in charge of securities analysis at Pacific United Inc., a provider of professional proposition services in the United States from 2000 to 2004. Mr.
Added
From 2020 to 2023, Mr. Komoda was the Chief Executive Officer of The beef company, his Japanese Miyazaki Wagyu family business in Japan, where he was responsible for investment, financing and business development. From 2018 to 2020, Mr.
Removed
Shi received his bachelor’s degree in Business Management from Towson University in Maryland in 1999. Mr. Shi studied at Harvard Business School (“HBS”) from 2018 to 2019 and graduated from HBS’s Senior Leadership Program in August 2019. Mr. Chi Tak Sze is our founder and director and is one beneficial shareholder of our company. Mr.
Added
Komoda served as Overseas Partner of Beijing 10 FUND (Beijing) Capital Management Co., Ltd., where he developed overseas fundraising channels, organized overseas cross-over forums for international brand recognition and managed the investment into AI, Education, and Consumer Goods industries. From 2013 to 2018, Mr.
Removed
(Nasdaq: NVVE), previously known as Newborn Acquisition Corporation (Nasdaq: NBAC), a blank check company until March 2021 when it consummated its business combination. Mr. Sherman has served as a director of Lakeshore Acquisition II Corp., another special purpose acquisition company listed on Nasdaq, since March 2022. Mr.
Added
Komoda served as Co-founder and Chief Operational Officer of Beijing Alesca Life Technologies Ltd, where he designed and built hydroponic vertical farm in shipping container, found the world’s first FAAS concept product and formed mass production line, raw material supply chain management to create total production to sales model. Previously, Mr. Komoda founded Seoul A.S.K.
Removed
Bai has been licensed to practice law in China since 2005, and was admitted to the New York State Bar in 2011. 89 Family Relationships Our founder and director, Mr. Chi Tak Sze, is the father of Mr. Hongtao Shi, our Chairman and Chief Executive Officer.
Added
Partners Co., Ltd., and served as Chief Executive Officer from 2012 to 2013. In addition, Mr. Komoda was overseas sales manager and operation assistant of Tokyo SENKO Advanced Components Limited from 2008 to 2012. Mr. Komoda graduated from Canada McGill University in major of marketing and international business in 2008. Mr. Chi Tak Sze is our founder and director. Mr.
Removed
The audit committee oversees our accounting and financial reporting processes and the audits of the financial statements of our company.
Added
The employment agreement has been automatically extended for another three years since the expiration of the initial term on January 31, 2022, but was terminated on December 20, 2024, upon Mr. Hongtao Shi’s resignation as Chief Executive Officer. Our employment agreement with Mr.
Added
Kazuho Komoda, our Chief Executive Officer, has a term of three years beginning on December 20, 2024, and provides for an annual salary of $102,000. 86 Our employment agreement with Mr.
Added
Insider Participation Concerning Executive Compensation The compensation committee of the board of directors of the Company will continue to make determinations regarding executive officer compensation. Share Incentive Plan We approved the Prestige Wealth Inc.
Added
Equity Incentive Plan on December 30, 2024, which we refer to as the Plan, to attract and retain the best available personnel, provide additional incentives to employees, directors and consultants and promote the success of our business. The maximum aggregate number of shares which may be issued under the Plan is 4,500,000 Ordinary Shares.
Added
As of the date of this annual report, we have not granted any awards under this Plan to our executive officers and directors. The following paragraphs describe the principal terms of the Plan: Types of Awards .
Added
The Plan provides for the granting of Non-qualified Share Options, Restricted Share Awards, Restricted Share Unit Awards, Unrestricted Share Awards, Distribution Equivalent Right Awards, Performance Share Awards, Performance Unit Awards, Share Appreciation Rights, Tandem Share Appreciation Rights, or any combination thereof, and solely for non-U.S. employees, Incentive Share Options. Plan Administration .
Added
The Plan will be administered by a committee comprised of two (2) or more members of the Board who are independent directors or are the non-employees of the Company (the “Committee”) to be appointed by the Board, which, if necessary, in the Board’s discretion, will in compliance with Rule 16b-3 under the Exchange Act or relevant securities exchange or inter-dealer quotation service.
Added
Eligibility . We may grant awards to employees, directors and/or consultants determined by the Committee to be eligible for participation in the Plan in accordance with its terms. Vesting Schedule . In general, the Committee determines the vesting schedule, which is specified in the relevant award agreements. Exercise of Awards .
Added
In general, the Committee determines the exercise or purchase price, as applicable, for each award, which is stated in the relevant award agreements. Options that are vested and exercisable will terminate if they are not exercised prior to the time as the Committee determines at the time of grant. Transfer Restrictions .
Added
Awards may not be transferred in any manner by the participant other than in accordance with the exceptions provided in the Plan or the relevant award agreements or otherwise determined by the Committee, such as transfers (i) by will or by the laws of descent and distribution or (ii) where permitted under applicable tax rules, by gift to any family member of the participant, subject to compliance with applicable laws.
Added
Terms of Directors and Executive Officers Each of our directors holds office until a successor has been duly elected and qualified. All of our executive officers are appointed by and serve at the discretion of our board of directors.
Added
Corporate Governance Practices As a Cayman Islands exempted company listed on the Nasdaq Capital Market, we are subject to Nasdaq corporate governance listing standards.
Added
However, Rule 5615(a)(3) of The Listing Rules of the Nasdaq Stock Market (the “Nasdaq Rules”) permits foreign private issuers like us to follow certain home country corporate governance practices in lieu of certain provisions of the Rule 5600 Series of the Nasdaq Rules.
Added
A foreign private issuer that elects to follow a home country practice instead of such provisions, must disclose in its annual reports each requirement that it does not follow and describe the home country practice followed by it.
Added
Our current corporate governance practices differ from Nasdaq corporate governance requirements for U.S. companies in certain respects, as summarized below: ● Shareholder Approval. Rule 5635(c) requires shareholder approval for certain issuances of securities. In this regard we have elected to adopt the practices of our home country.
Added
In accordance with the provisions of our Amended and Restated Memorandum and Articles of Association, our board of directors is authorized to issue securities, including ordinary shares, warrants and convertible notes. ● Shareholders Meeting. Rule 5620 requires meetings of shareholders shall be held annually. In this regard we have elected to adopt the practices of our home country.
Added
In accordance with the provisions of our Amended and Restated Memorandum and Articles of Association, we do not need to hold the annual shareholders meeting. 89 D. Employees We and our subsidiaries had 4 full-time employees as of September 30, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

14 edited+4 added−5 removed3 unchanged
Compensation— Employment Agreements and Indemnification Agreements” for a description of the employment agreements we have entered into with our senior executive officers. 7.C. Interests of Experts and Counsel Not applicable. 95
Compensation— Employment Agreements and Indemnification Agreements” for a description of the employment agreements we have entered into with our senior executive officers. 7.C. Interests of Experts and Counsel Not applicable.
Major Shareholders The following table sets forth information with respect to the beneficial ownership of our ordinary shares, as of February 1, 2024, by: ● each of our directors and executive officers; ● all of our directors and executive officers as a group; and ● each person known to us to own beneficially more than 5% of our ordinary shares.
Major Shareholders The following table sets forth information with respect to the beneficial ownership of our ordinary shares, as of February 13, 2025, by: ● each of our directors and executive officers; ● all of our directors and executive officers as a group; and ● each person known to us to own beneficially more than 5% of our ordinary shares.
We entered into a supplementary agreement with Prestige Financial Holdings Group Limited to extend the due date for the remaining $0.56 million of the principal to a date that is immediately before the effectiveness of the Company’s registration statement, with the outstanding amount payable at any time, at the same interest rate as provided in the original loan agreement.
We entered into a supplementary agreement with PFHGL to extend the due date for the remaining $0.56 million of the principal to a date that is immediately before the effectiveness of the Company’s registration statement, with the outstanding amount payable at any time, at the same interest rate as provided in the original loan agreement.
The balance as of September 30, 2022 mainly represented a payment of HK$8.65 million (approximately $1.1 million) for brand promotion fee and a loan principal and the related interests of HK$11.06 million (approximately $1.41 million).
Therefore, as of September 30, 2024, the Company did not write off the balance. The balance as of September 30, 2022 mainly represented a payment of HK$8.65 million (approximately $1.1 million) for brand promotion fee and a loan principal and the related interests of HK$11.06 million (approximately $1.41 million).
Chi Tak Sze, our director, in the amount of $1,592,593 as of September 30, 2023, $2,993,971 as of September 30, 2022, and $1,501,890 as of September 30, 2021. The balance as of September 30, 2023 mainly represented the balance due from PFHL for it operation purpose, which was due upon request.
Chi Tak Sze, our director, in the amount of $1,686,600 as of September 30, 2024, $1,592,593 as of September 30, 2023, and $2,993,971 as of September 30, 2022. The balance as of September 30, 2024 and 2023 mainly represented the balance due from PFHGL for its operation purpose, which was due upon request.
The calculations in the table below are based on 9,150,000 ordinary shares issued and outstanding as of February 1, 2024 comprised of 4,014,211.2 Class A ordinary shares and 5,135,788.8 Class B ordinary shares. Beneficial ownership is determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to the ordinary shares.
The calculations in the table below are based on 31,641,959 ordinary shares issued and outstanding as of February 13, 2025 comprised of 18,886,170.2 Class A ordinary shares and 12,755,788.8 Class B ordinary shares. Beneficial ownership is determined in accordance with the rules and regulations of the SEC and includes voting or investment power with respect to the ordinary shares.
We entered into a loan agreement with Prestige Financial Holdings Group Limited on March 31, 2022 with the principal in amount of US$1.72 million with term in six months and annual interest in 6.5% respectively.
We entered into a loan agreement with PFHGL on March 31, 2022 with the principal in amount of US$1.72 million with term in six months and annual interest in 6.5% respectively. US$1.37 million and US$0.35 million were paid by one of our subsidiaries on March 31, 2022 and May 12, 2022 to PFHGL, respectively.
US$1.37 million and US$0.35 million were paid by one of our subsidiaries on March 31, 2022 and May 12, 2022 to Prestige Financial Holdings Group Limited, respectively. As of October 19, 2022, US$1.21 million of the principal and interest had been paid back by Prestige Financial Holdings Group Limited under this loan agreement.
As of October 19, 2022, US$1.21 million of the principal and interest had been paid back by PFHGL under this loan agreement.
David Sherman (4) — — — — — — Adam (Xin) He (4) — — — — — — Junlin Bai (4) — — — — — — All directors and executive officers as a group 304,000.0 7.57 % 5,135,788.8 100.0 % 59.45 % 96.52 % Principal Shareholders: Prestige Financial Holdings Group Limited(1) — — 5,135,788.8 100.0 % 56.13 % 96.24 % * For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class.
David Sherman (1) — — — — — — Adam (Xin) He (1) — — — — — — Junlin Bai (1) — — — — — — All directors and executive officers as a group 304,000.0 1.61 % 1,314,117.0 10.30 % 5.11 % 9.70 % Principal Shareholders: PFHGL(4) (5) — — 2,236,383.8 17.53 % 7.07 % 16.32 % Qianfan Wang (4) — — 1,717,641.0 13.47 % 5.43 % 12.54 % Danna He (4) 1,740,183.0 9.21 % — — 5.50 % 0.64 % Xinghua Yang (4) 1,663,596.0 8.81 % — — 5.26 % 0.61 % * For each person and group included in this column, percentage of voting power is calculated by dividing the voting power beneficially owned by such person or group by the voting power of all of our Class A and Class B ordinary shares as a single class.
Ordinary Shares Beneficially Owned as of February 1, 2024 Percentage of total ordinary Percentage of Class A ordinary share Class B ordinary share shares on an as aggregate Number % Number % converted basis voting power* Directors and Executive Officers: Chi Tak Sze (1) — — 5,135,788.8 100.00 % 56.13 % 96.24 % Hongtao Shi (2) — — — — — — Ngat Wong (3) 304,000.0 7.57 % — — 3.32 % 0.28 % H.
These shares, however, are not included in the computation of the percentage ownership of any other person, except with respect to the percentage ownership of all executive officers and directors as a group. 90 Ordinary Shares Beneficially Owned as of February 13, 2025 Percentage of total ordinary Percentage of Class A ordinary share Class B ordinary share shares on an as aggregate Number % Number % converted basis voting power* Directors and Executive Officers: Chi Tak Sze (1) — — — — — — Kazuho Komoda (2) — — 300,000.0 2.35 % 0.95 % 2.19 % Ngat Wong (3) 304,000.0 1.61 % 1,014,117.0 7.95 % 4.16 % 7.51 % H.
Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. (1) Mr. Chi Tak Sze is one of our directors and also the 100% owner of Prestige Financial Holdings Group Limited, which holds directly 5,135,788.8 Class B Ordinary Shares. (2) Chairman of the Board of Directors and Chief Executive Officer.
Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. (1) Director. (2) Chairman of the Board of Directors and Chief Executive Officer. (3) Chief Financial Officer and Chief Operating Officer. (4) Shareholder with more than 5% of our Ordinary Shares. (5) PFHGL is presently undergoing a court winding up process.
As of December 1, 2022, the remaining $0.56 million of the principal and its interest had been repaid in full to the Company by Prestige Financial Holdings Group Limited. The balance as of September 30, 2021 mainly represented a payment of HK$8.65 million (approximately $1.11 million) for brand promotion fee.
As of December 1, 2022, the remaining $0.56 million of the principal and its interest had been repaid in full to the Company by PFHGL. 91 Transactions with Prestige Securities Limited (“PSL”). We had amount due from PSL, wholly owned by PFHGL, in the amount of $15,432. The balance mainly represented the rental fees due from PSL.
(3) Chief Financial Officer and Chief Operating Officer. (4) Director. 94 7.B. Related Party Transactions Material Transactions with Related Parties Amounts due from related parties Transactions with Prestige Financial Holdings Group Limited We had amount due from Prestige Financial Holdings Group Limited, our 56.13% shareholder and wholly owned by Mr.
Paul Preiove and Johnhy Law are the joint liquidators of PFHGL. 7.B. Related Party Transactions Material Transactions with Related Parties Amounts due from related parties Transactions with PFHGL We had amount due from PFHGL, formerly wholly owned by Mr.
Amounts due to related parties Transactions with Prestige Securities Limited We had amount due to Prestige Securities Limited, in the amount of nil as of September 30, 2023, $27,962 as of September 30, 2022, and $13,354 as of September 30, 2021. The balance mainly represented rental expense owed to Prestige Securities Limited.
Ngat Wong, Chief Financial Officer of the Company, in the amount of $20,600 as of September 30, 2024, nil as of September 30, 2023 and 2022. The balance mainly represented expenses paid by Mr. Ngat Wong on behalf of the Company. We had amount due to Mr.
Removed
These shares, however, are not included in the computation of the percentage ownership of any other person, except with respect to the percentage ownership of all executive officers and directors as a group.
Added
On December 7, 2024, the Company received a letter and was informed that PFHGL was in liquidation by an Order made by the Eastern Caribbean Supreme Court in the British Virgin Islands since December 2, 2024.
Removed
As of the date of this annual report, we do not have any additional material related party transaction with Prestige Financial Holdings Group Limited. Transactions with Prestige Securities International Inc. In May and June 2020, we entered into two loan agreements with Prestige Securities International Inc., an entity controlled by Prestige Financial Holdings Group Limited, our 56.13% shareholder.
Added
As of the date of this report, the Company has claimed the amount due from PFHGL to the Joint Liquidators’ office of PFHGL in an attempt to collect the balance. As of September 30, 2024, the Company fully booked the allowance of the amount due from PFHGL, and the Company was still in the process of collection.
Removed
We agreed to lend and paid HK$0.5 million (approximately $0.06 million) and HK$1.1 million (approximately $0.14 million) in May and June, respectively, with terms of one year and an annual interest in 6.5% on both loans.
Added
As of September 30, 2024, the Company fully booked the allowance of the amount due from PSL considering the status of PFHGL. Amounts due to related parties Transactions with Director and officer We had amount due to Mr.
Removed
The full amount of the principal and interest the loans had been paid back by Prestige Financial Holdings Group Limited on behalf of Prestige Securities International Inc. as of March 31, 2021. As of the date of this annual report, we do not have any amount due from Prestige Securities International Inc.
Added
Hongtao Shi, former Chief Executive Officer and former Chairman of the Board of Directors of the Company, in the amount of $65,001 as of September 30, 2024, nil as of September 30, 2023 and 2022. The balance mainly represented expenses paid by Mr. Hongtao Shi on behalf of the Company. Employment Agreements See “Item 6. Directors, Senior Management and Employees—6.B.
Removed
We lease the office premises from Prestige Securities Limited under non-cancellable operating leases with an expiration date on July 31, 2023. The monthly rental expense is HK$20,000 ($2,542). As of the date of this annual report, we do not have any amount due to Prestige Securities Limited. Employment Agreements See “Item 6. Directors, Senior Management and Employees—6.B.